Recently, a woman sat across from me in the office and she was nearly in tears. She was going through the credit repair process I outlined in The 90 Day Credit Challenge and she had reached the point where she was dealing with creditors on overdue accounts.

Unfortunately, this was a psychological brick wall for her. She had a few overdue accounts and she called the first one hoping to work out a payment plan but she felt that she had been railroaded by uncaring debt collection departments of the various lenders she had borrowed from. Her first call ended in tears and any thought of trying to call them back or call the other creditors on the list left her nearly in fits of anxiety.

I gave her a pointer that turned out to help her so I thought I’d blog about it in case it might help you too. Instead of calling the creditor and dealing with the embarrassment and frustration of trying to work out a payment plan, start with a smaller goal in mind: Call each creditor that you’re trying to work with and ask for a payment history.

They will send you a history of your payments, including the dates and the amounts they received from you. You can use this information to help you — and you just might find that it helps you a lot! Compare the information from your payment history to your bank statements and check stubs. Build up a picture of your payment history with each creditor to see what you really bought, what you really paid, when you paid it, and how the creditor sees your payments.

Here are a few things you might find:

• Of course, you will see that there were times when a payment was indeed received late or not received at all and they are correctly assessing your account as overdue. But that’s not the ONLY reason that an account might be overdue.

• Sometimes a payment was sent by you, received by the creditor, but a late fee was charged to your account. So you might have thought that the amount owing was paid off but it really wasn’t.

• Sometimes a creditor overcharged you, you paid the correct amount but the incorrect amount is still showing as being owed by you. (I’ve recently seen this happen with a rental car service where the customer declined the extra insurance but the rental car company accidentally charged it anyway).

• Sometimes a payment was sent by you but incorrectly entered by the creditor. It happens a lot more than you might realize. They receive the money and maybe someone accidentally credits the wrong account with the money or maybe someone types that you paid “$1.07” instead of “$107.00”. If you can prove that you sent the money in (using your banking information) then they can correct the error. Who knows, you might instantly turn an overdue account into a paid account!

With a record of payment history, you just might owe less funds! And even if you still have some outstanding accounts with creditors, you are now armed with knowledge and that is a powerful weapon when dealing with creditors because it helps you to determine what you really owe and just how overdue you really are.

My client (who was in tears in my office) used this method to get rid of one overdue account completely and to make payment plans with two others. I’m happy to report, she’s well on her way to making HUGE strides in having healthier credit.

Please email me your credit questions [email protected]