BILLS, BILLS, BILLS, a fact of life and we’ve got to take of them or pay the consequence. I am sure this task is not on your list of “most favorite things to do” but I’m here to help you make it a little less tedious. Other than maybe have your gas and water turned off, you may think that there is just a small late fee for paying your bills late; I am here to tell you that you are sadly mistaken. There are financial consequences to not paying your bills or even paying them late.
We may not be walking around with our FICO scores blinking on top of our heads but it is ALWAYS there when dealing with anything related to our credit. When you do not pay your bills on time, not only is there a late fee penalty and interest incurred, it also lowers your FICO score.
Your FICO (Fair Isaac Corporation) score is your credit score that is generated using your financial history and habits to predict what your financial future may hold. Your credit score is then used to help lenders predict financial behavior, if someone is likely to pay bills on time or not, or if someone can handle a large credit line. Insurance companies use these scores as well to predict if someone may or may not file insurance claims
Of course this is just an analysis done using your previous habits and you have the power to change that. The only way to have your FICO score change is to change your financial habits. It will not happen overnight, the analyst will have to see change for a certain period of time and it must be consistent.
Okay, so now that you understand how all that mumbo jumbo works let’s get our bill paying process organized!
Most banks offer FREE online bill pay, so let’s take advantage of that! Make a list of all your monthly payments (utilities, insurance, rent, credit cards, etc.) and set that up in your banks online bill pay module.
On a daily basis sort through all your mail and make a special place to keep all your bills and any other paperwork you need to take care of around the house. No matter when you get paid, bills come due at various times during the month, and typically the due dates have nothing to do with how you are getting paid.
If you have the time and patience you could call all the utility companies and some will change your due date to fit around your pay schedule.
Once a week, and set up one specific day a week, enter the payment into your bank’s online bill pay module, to be paid by the due date. You are able to schedule payments online so that it can be done before it is actually due and you will not miss your payment due date.
Another way to eliminate any chance of any late fees or interest fees is by having all your bills paid automatically by being deducted straight from your bank account or charged to your credit card.
If you are ready to go paperless, most companies offer email reminders and all you have to sign online to download your bills and can save them on your computer and eliminate all paper bills entirely. If you are someone that needs that piece of paper and don’t trust the paperless way (YET) you can print the statement instead of saving it on your hard drive. This way will just eliminate the need to sort through so much mail.