Why Knowing Your Statement Closing Date Is So Important

In "The Blueprint", I spoke about the Prism Money Management app and how valuable it was in helping you to pay your bills on time each month. What I didn't mention is how useful it is for helping to raise your credit scores. Knowing your creditor's statement closing dates is vital to reaching your credit goals.

You're probably asking how can a financial app help me raise my scores when the app just reminds you to pay your bills on time. That's true. It does do that but it does so much more. It also allows you to pay each of your bills right from within the app, which is pretty cool in itself, but wait, there's more.

What the Prism app does better than anything is to let you know at a glance your statements starting and closing dates for each of your bills. The app makes them viewable all in one place without the need to log in to each creditor's website or needing to wait for your statement to arrive in the mail if you have not yet subscribed to paperless billing.

We all know that paying your bills on time is important, but it's "WHEN" you pay them that's most important. Let me explain. Your statement closing date is when your creditor reports how much you owe to the credit bureaus each month. Let's say that your credit card closing date falls on the 3rd of each month. You will want to pay as much on that bill as you can before the statement closes and your balance is reported to the bureaus.

If you know your statements closing date, you can use this information to determine which bills to pay first. For example: If you know that you're already past the closing date of a particular bill, then paying more towards this bill will do nothing to affect your credit scores because the balance has already been reported to the credit bureaus.

You can also give yourself a short term loan each month by paying all your expenses with a major credit card and then paying the balance off in full before the statement closing date on your next payday. Let's say that you charge $1000.00 during the first two weeks after payday. As long as you pay the balance in full before the statement closing date, then your creditors will report a zero balance to the credit bureaus, thereby lowering your utilization and raising your scores.

In contrast, if you carry a balance or don't pay anything towards that $1000.00 by the time your statement closes, then your creditor will report a balance of $1000.00. In this scenario, your utilization increases by $1000.00 which only hurts your credit scores because it shows that you owe more money, thereby, potentially lowering your scores.

Here is one very important thing to note. Only pay your bills "AFTER" your credit card statement is generated and never before. Paying before your statement is available is the equivalent of paying towards last month's statement instead of your current month's bill. This could make you think that your current bill is paid, but in fact, you only paid more towards last month's bill. Now, your creditor can report your current month's bill as late and unpaid.

You might also like: The Blueprint - By Bill Collectors Hate Me

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Can Covid-19 cause a surge in payday loans?

Getting a payday loan already requires several things including a bank statement covering the last 30 days, your current account balance, a recent utility bill, driver's license, a social security card, and several personal references, among other things in order to be approved for a loan.

Stricter approval policies may be put in place by lenders to make sure that you are still employed full time and have not been furloughed. This could mean limiting the amount you can borrow to minimize their losses if you don’t pay.

I can also see the pandemic forcing smaller payday lenders to close stores or implement layoffs. Several payday stores had already shut down due to the latest regulations that called for capping a borrower's interest to 36% compared to the normal 350–500% that they typically charge.

You might also like: The Payday Loan Honor System

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The Bill Collectors Hate Me Group Is Growing!

Almost a year ago, I invited followers of my blog to join the "Bill Collectors Hate Me Group" where members can discuss credit-related issues in an open forum environment so that other members can view the discussion and share their experiences in similar situations.

Well since then, membership has increased considerably over the last month since the release of "The Blueprint Credit Repair Guide" that is available to group members and email subscribers only. There are currently no plans to release this guide to the general public but members who already have access are free to share it with family, friends and social media groups.

This group features articles that are exclusive to group members and will not be available on the general public blog. Group membership will ensure that you have access to all that "Bill Collectors Hate Me" has to offer. There is also a group chat for "real-time" answers to your questions.

In closing, I ask that you continue to share "Bill Collectors Hate Me" as much as you feel comfortable and I will continue providing you with the most useful credit-related content available on the web today. Thank you for your ongoing support!

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What Happens When Debt Collectors Sue?

While living in San Diego, California I moved into a new apartment and I didn't own anything but the clothes on my back. I didn't want the hassle of having to save up the money to furnish my new place because I knew it would take forever, but in hindsight, I wish that I had waited.

My only option was to find someone who was willing to give a person with bad credit a second chance and as luck would have it, I found a company called Jerome’s. Jerome’s furniture was a family-owned business that had been open in several San Diego locations for many years.

Jerome’s was known for financing just about anyone. If they couldn’t find a lender to loan you the money for your furniture purchase, then they’d finance it for you themselves. It was a sweet deal. I wish that more companies operated this way.

Surprisingly, I was approved by one of their outside lenders and I was given enough credit to completely furnish my living room. As the salesman and I walked the showroom floor to see what was in my price range, I came across an all-white sofa sectional that had a tag on it claiming it to be leather.

It was the most beautiful piece of furniture I’d ever seen up to that point so the salesman and I began the paperwork. When I asked was this furniture real leather, he responded by saying that it was “Bonded Leather”.

When I asked what that was, he described it as genuine leather that was made from scraps of leather that was leftover from other furniture that was bonded together to cover a new piece of furniture at a cheaper price than your standard leather.

I’m thinking, oh that sounds great. I get a beautiful leather set for about half the normal price of non bonded leather. I figure that leather is leather so what could possibly go wrong? Everything went wrong.

First, the furniture started turning from a beautiful creamy white to yellowish color from sitting in front of my sliding balcony windows and absorbing the sunlight. Then after a few months, the tops of the sofas started to crack and peel and would stick to my clothes when I stood up.

Now, I’d only had the furniture about 9 months at this point, if even that, and I still owed over two thousand dollars on it and I refused to pay for something that wouldn't even last the total time of my two-year contract to pay for it.

That’s when the collection calls started rolling in by the dozens. I sent formal cease and desist letters, told them that I refused to pay, and explained the reason why but they kept on calling me. I disputed and disputed but nothing worked. They refused to let me off the hook by allowing me to have the debt removed from my credit reports.

Three years later the collection still showed on my credit report until finally, I’d had enough. I had completely forgotten that I had been paying $10 a month for a prepaid legal service for close to 15 years that I never used, so I decided to call them up.

The attorney that assisted me gave me step by step instructions and told me exactly what forms I needed to file and what I needed to include in them in order to fight my case in court if I needed to. I went to the courthouse, filed my answer to the summons, paid my fee and 30 days later my case was dismissed and I never heard from the third party collection agency again.

But that wasn't the end of it. Even after winning my case against them, they still would not remove the collection from my credit reports. For the first time in my life, I had to wait out the entire 7 years before the law said that they legally had to remove the collection from my credit reports.

It was the hardest fight that I had ever fought and even though I was unable to have it removed from my credit reports as fast as I would have liked to, I still won in the end because I never had to pay the remaining balance owed on the furniture plus the exuberant penalties and late fees that they assessed totaling over $5,000.

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