Tips to Communicate with Creditors

With many federal pandemic support programs coming to an end some of us may again find ourselves in a difficult financial situation. Or maybe we’ve been working a spending plan but are starting to find it hard to stick to because life happens. Sometimes, no matter how well we plan, it can be tough to manage through unexpected financial challenges like a sudden change in income, rapidly rising prices or an emergency expense.

When we hit a bump in the road, it is possible to become overextended, making it difficult to stay on track with loan and credit card payments. Getting behind on payments can be stressful but connecting with creditors gives you the best options.

1. Preview your specific situation

Before you reach out to creditors, consider taking the time to get all your information together in one place, including account numbers, outstanding balances, payment history, etc. It is also helpful to research some other options like deferment or debt management plans to reduce any chance of surprise when you speak with your creditors.

2. Know your spending plan

Carefully look over your spending plan before speaking with creditors to understand what payments you can manage. Affordability is key. Confirm how much income you can count on each month and how much you need to set aside for housing and living expenses. When you have a sense of how much you owe verses how much you can pay, may be able to work with creditors more effectively.

3. Make the connection

Making the first call can be stressful, but necessary. People who connect with their creditors immediately after experiencing payment issues have the greatest chance of success. Creditors will usually understand the situation if household income is reduced or there are other issues. An honest discussion with creditors helps all parties figure out the best options.

If you have a healthy credit history your creditors will look at your track record of consistently paying bills on time. This will make the conversation go a lot easier and the options can be easier to manage as well.

4. Connect with the decision maker

Once you make the call to the creditor, kindly ask who you are speaking to about your account. Be sure you are connected to the person that can help with your specific situation. Explain the situation and ask to be transferred to the best resource. This will reduce the number of times you have to repeat information and speed up the process to find your best options.

5. Document the conversation

It's good practice to document the conversations you have with each creditor. Make note of the date, the name of the person you spoke with and any changes or new processes for payment. It will be helpful to track key discussion points in writing in case there are any questions as you pay down debt.

The Member Relationship Specialists at our Financial Health Centers are here to help you build and maintain financial slack. Stop by or make an appointment so we can support you through these challenging times and find a solution that works for you.