How to Never Miss a Payment (and protect your credit score)
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How to Avoid Late Payments and Protect Your Credit Score???
Most people know the importance of paying their bills on time. Late payments can result in late fees, and payment history has a huge impact on credit scoring – making up about 35% of our score.
But interestingly, more than 30% of Americans surveyed admitted to missing a payment. And not because they didn’t have money to pay the bill, but because “they simply forgot.”
The good news is that creditors can’t report a lateness to the credit bureaus until you’re at least 30 days past due. But even if a late payment doesn’t impact your score, it can be costly.
Life can get hectic and busy at times, so an expense might fall through the cracks. Rather than have a costly “oops” moment, here are five tips to help you pay bills on time…every month.
1. Aligned due dates with your paycheck
It might come as a surprise, but it’s possible to adjust or change your due dates. Not every creditor offers this option, but it doesn’t hurt to ask. By aligning due dates with your paycheck, you can pay bills as soon as the money is available.
Now, you might not be able to change your mortgage due date. But it’s possible to adjust other bills like utilities, insurance payments, and even your credit card payment. Give your lender or creditor a call and see what they say.
2. Automate
I realize that some people don’t like the idea of automating their payments. Some people want to be in complete control of their finances. So they prefer manually submitting payments, instead of creditors drafting their bank account.
I completely understand.
However, if you’re pretty good with budgeting and you always have money available for bills on or before your due date, give automating a try before knocking it – especially if you’ve forgotten about due dates in the past. I know from experience that it can simplify our finances (and life).
If you still don’t like it after a month or two, you can always stop it and resume manual payments.
3. Schedule bill paying times
Another tip to never forget a payment is to schedule specific bill paying times. You might have two or three days throughout the month where you sit down and pay your bills. Maybe the 1st and 15th, or the 10th, 20th, and 30th.
4. Opt-in for payment reminders
If you make payments via an online account, you can also opt-in to payment reminders. Basically, your creditor or lender will send an email reminder a couple of days before your due date, if they haven’t received a payment yet.
5. Pay bills as soon as they arrive
Understandably, this isn’t an option for everyone. But if you have funds in your account for a bill, go ahead and pay it early. There’s no rule that says you have to wait until your due date to submit a payment. Actually, the longer you wait and procrastinate, the greater the risk of forgetting about the bill and getting hit with a late fee.