Let’s think about some of the things that damage credit. First there’s bankruptcy or foreclosures that are destructive to credit. However, one of the most painful to your credit score is one that you may not realize is so harmful. Paying bills late is a huge and avoidable issue when it comes to your finances. Out of the main issues that affect a person’s credit, paying bills late and having to pay late fees on those bills are by far the most damaging to your credit score. Not only does it harm your credit, but those pesky late fees can certainly add up fast.
There are various reasons why people cannot pay their bills on time. It could be lack of money at the current time that bills are due, it could be that bills are forgotten or even lost. However, the best way to get rid of them is to avoid them altogether. Here are a few tips that can help you to ensure that your credit score remains a little bit stronger and can eliminate any havoc that looming late fees have on your mind and your credit score.
Pay As Soon As Possible
Of course, we often sit aside bills on a desk or counter and let them go until we think about them again. We have our sigh of “Ugh,” when we receive them in the mail and then there they sit until we get good and ready to sit down and start making out payments or submitting them online. Organize those bills and one of the best ways to do so is to write on the outside of the envelope the date that payment is due. This helps you keep them organized so that you can see when they are due immediately upon looking at them without opening them.
In theory, it is nice to pay them the day that you get them if you have the funds available. Sometimes money sitting in your checking account draws interest and it’s nice to have that money sitting in there to accrue additional finances. However, the interest that the money draws within that checking account, on average, is significantly less than the money that you will have to divulge out to pay late fees. The average late fees are generally anywhere from $20 to $40 depending on the creditor. This can quickly diminish your saved up stash in your checking account just by missing payments even by a day or two.
Pay Bills Online
Many times, we still pay our bills by check, taking the time to write it out, address it, get a stamp for it and take it to the post office to mail. In fact, these days, paying online is much easier. If you set up your payments to be electronically debited automatically, you are sure to pay all of your bills on time. It is a flawless way of eliminating late fees.
If you are more cautious about when money comes out, you can still set up a future payment date of when you want the payment to be processed. Just keep track of the due dates and try to pay bills online a few days before they are actually due so that there is time for processing.
Some bills we do automatically let roll out of our account such as mortgages, insurance fees and sometimes club memberships. However, utility bills and credit card bills are typically some that we prefer to check more closely to see how much we are actually paying so we can pay the exact amount or sometimes pay the minimum payment on credit cards. There is even sometimes an alternative to paying bills via telephone but the companies typically require a $5 to $15 fee for processing on the phone. It is more instantaneous than snail mail but even so those fees can add up, though they are typically less than late fees.
Opt for Companies to Send Reminders
Regardless of what method you use to pay your bills, you can usually opt in for reminders to be sent to you via email or text message to tell you that your bill is ready, even on the date it is released. This is a good way to keep it in mind, but even still, you can oftentimes overlook them. They still at least keep the payment notification fresh in your brain and you can read it to check for your bill due dates. Many companies offer these updates for free but some still do not. Check with the company to see if it is something you can opt in for.
Keep Reminding Yourself
If it becomes habitual, you won’t forget to do it. Keep reminding yourself and it will soon turn into something you almost do automatically. Some bills you can remember are due on certain dates and when that date rolls around every month, you may have an “Aha!” moment in which you know it’s time to regularly pay your scheduled payment. Make sure you remind yourself a few days in advance so that if you recall that a bill is due on the 10th of every month, you can remind yourself around the 7th or 8th of each month that it is time to pay it.
Other than trying to rely on your own brain, of course there are calendars. You can mark them up at home to note when each bill payment is due. Otherwise, there are other calendars that can help you remember to pay bills on time. There are many calendars that can be set up on computers or a Smartphone that can also send you notifications of any items that you have put on your calendar. Set up bill payments as if they are appointments. Some smartphones have alarms that go off on those days or the calendars can send you electronic reminders. Again, set these for a few days in advance so that you can ensure that your payment will reach its destination on time.
Remember, it isn’t just credit cards that issue late fees. There are several others that will tack late fees on for various reasons. Every little $5 or $40 adds up, especially if you commonly forget to make your payments monthly.
If It Still Happens
Sometimes life happens and other things like emergencies can often let things slip through our minds. It’s just how it is sometimes. If at some point, for any reason, you do incur a late fee, you may be able to call the company, especially if you are only a few days late, notify them that there is a payment on its way and ask them to please consider removing the penalty. Many companies will do this as a one-time courtesy. If you have been a client of theirs for a significant period of time and have been consistent with paying your bills, they will often grant forgiveness and let you maintain your good standing with their company. Many times this will get the late fee taken off your bill. If it doesn’t work with the first customer service representative, ask to speak to a supervisor. Don’t be defensive or offer blame but instead be sincere, insist that you had made a mistake an let them know what you have done to proceed with your current payment to keep your account up to date as well as any other efforts you are taking to keep it from happening again.