I learned that I was charged a $20 late fee, for the past 2 months, for late payments on my home equity line of credit, and that I had overdue payments. Unsure as to how this happened, I called the bank right away. After all, I didn’t want this to ruin my credit.
I didn’t understand how I could have late fees or overdue payments since the loan was set up to deduct my monthly payments directly from my checking account. The payments had been deducted from the opening of the line of credit clear through December of last year. I had more than enough money in both my checking account and savings account to cover the payments. How could my payments be late if the bank was responsible for withdrawing the money?
I had been paying extra on the loan to pay it off much sooner than it’s due, and apparently that threw the computer off, or so I’m told. My extra payments apparently stopped the computer from deducting the monthly payments, which were a much smaller amount than my extra payments.
My extra payments of $250 here and $400 there still left me with an overdue balance on my $132 monthly payment. I still don’t understand how paying 2-3 times as much as is due qualifies my payments as irrelevant, and thankfully neither did the collections agent. She put me on hold to sort things out. When she came back on the phone, she said that my late fees would be reversed and that it would be taken off of my credit report since the issue was due to a computer glitch instead of human error on my part.
I could have just taken a check to the bank to cover the late fees and pay my outstanding balance right away, but I’m glad I didn’t. Had I done that, the issue that wasn’t even my fault would have negatively impacted my credit score, and I would have unnecessarily paid late fees that I shouldn’t have even been charged in the first place.
When you receive a collections letter, it’s natural to try to rush through the payment process to try to get the problem cleared up as quickly as possible, but sometimes a little bit of patience and clear-thinking will produce a much better outcome. If this ever happens to you, try to relax and figure out the situation. It’ll produce a much better result than fearfully paying a bill that you might not even owe.
Article by Randi Millward