The biggest chunk of your FICO score goes to your payment history — a single missed payment will sink your credit score fast. Why? Because you can tell everything about a person by whether or not they pay their bills on time.
If you’re missing payments because you’re struggling financially, seek help with meeting your household expenses. But if your head is above water, follow this guide to never being late again.
Make Your Robot Earn Its Keep
Whether it’s Alexa, Siri, Cortana or the oh-so-imaginatively named Google Assistant, you probably spend a good portion of your day talking to a robot — and that can be your first line of defense for paying your bills on time.
“Whether they’re alarms on your phone or reminders with your smart assistant, setting reminders to pay your bills is a good way to prevent being late on payments,” said Julie Ramhold, consumer analyst with DealNews.com. “Just be sure to set your reminders ahead of time — you want to give yourself a little cushion on paying your bills in case there are any hiccups.”
Use Autopay — But Use It Wisely and Only for the Right Bills
Most recurring bills come with the option of autopay, which makes sense for predictable payments.
“If they don’t change much from month to month, it’s a good idea to use this,” Ramhold said.
She made that distinction because it’s good to stay alert and keep tabs on bills that vary — you should be aware of how much credit you’re using, for example, and how much you’re spending on electricity and gas.
Also, while the whole point of autopay is to set it and forget it, you should enroll in email confirmations or set reminders to check that the payment was processed.
“The last thing you want is to incur a late fee because there was a technical hiccup and something didn’t go through when it was supposed to,” Ramhold said.
Never Underestimate the Power of Getting Into a Routine
If you’re on the ball, paying your bills shouldn’t be a time of the month that you dread — but it should be a time of the month that you can predict.
“Whether you set up auto-pay or not, it’s a good idea to create a bill-paying routine,” Ramhold said. “Make it the same time every month — maybe the third Sunday for instance — and sit down to make sure any bills on autopay have been paid, and pay any that aren’t on autopay. By setting up this routine, it’ll be harder to forget to handle these chores.”
Corral It All Under One Roof
Regardless of how you remind yourself to pay your bills, and whether you automate or not, you’re bound to miss a payment eventually if you’re not organized. It doesn’t matter whether you use a spreadsheet, a dry-erase board or an app like Mint — what matters is that you have everything in one place.
“Keeping track of all your bills and due dates is a must to ensure you’re making payments on time,” Ramhold said. “It’s also a good way to keep track of your expenses, in general. You can get as specific as you want, but you should definitely note the bill and due date at least so that you’re aware of the billing cycle, which will then help you avoid missing deadlines.”
Don’t Wait Until the Due Date
However you pay your bills, strive to pay them early to give room for error to yourself, the company you’re paying and the technology that facilitates the transaction.
“Sending in payments by just a couple of days can make a huge difference,” Ramhold said. “Whether it’s technical issues or because payments won’t be processed over a weekend or something similar, giving yourself a little extra time to make the payments will help to ensure things go smoothly and that you don’t have to worry about late fees or missing payments entirely.”
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