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Consumer Watch: Why you need to talk to your creditors

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After the extended partial government shutdown, many Americans are dealing with harsh financial realities. That can include the decision to prioritize bills. For many, credit card bills fall far behind food, housing, and utility payments. If you ever find yourself in this difficult situation, ignoring the problem is the last thing you should do.

Late payments that go unpaid will be a negative hit to your credit score. If that's never settled, you'll start seeing words like delinquency and, worse still, charge off, on your credit score.

“You should always communicate with the collectors ahead of time before it gets to being that far down the road because at that point there is really nothing that can be done,” says Becky Estep, Credit Coach Queen owner.

Estep says she often deals with customers who are having a hard time turning their credit around. She says your best move, if you can't pay your bills, is to reach out to creditors right away, even before the payment is due if possible.

“You can call them ahead of time. You know that you are going to have some financial issues, and sometimes they can lower your interest rate, or they can put your payment off for a certain amount of time, so it doesn't destroy your credit,” says Estep.

If an item gets to that charge off status, you run the risk of being sued for the money. That could mean wage garnishment, that Estep says could be as much as 25-percent off your paycheck until the debt is paid.

These late payments, delinquency, and even charge offs remain noted on your credit report even when you get current. Most negative information stays on your credit report for seven years. It can affect your ability to get a mortgage or a car loan even if your credit score is healthy. This is why it is so important to talk to creditors early and keep those bad marks off your report all together.

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