Tips to help you pay debt on time

Not only does paying bills late affect your credit score, it also costs you in late fees and other penalties. If you have the cash to pay, but you still find yourself paying late, consider the following methods to get your bills paid on time:

  • Read the payment instructions. If you forget to include your account number on the check or pay on a holiday, the payment might not be processed by the due date.
  • At minimum, pay the minimum. Even if you can’t pay the full balance, at least pay the minimum to keep the account in good standing.
  • Automate payments. Today you can sign up for automatic payments for most bills, including utilities, credit cards, and more. The accounts are linked to your credit card or checking account, and the bill is automatically paid before or on the due date.
  • Batch your bills. Switch the due dates for all of your bills so that they’re all due on the same day or a range of a few days. That way you’ll only have to pay bills once a month, and you won’t run the risk of spending your paycheck and forgetting that the electric bill hasn’t been paid.
  • Use online alerts. Personal finance applications like MoneyStream and Mint will alert you to upcoming bill due dates.

It’s important to understand that paying off a credit account will not remove the history from your credit report – it stays on your report for seven years. Nevertheless, both good history and bad history count toward calculating your score, so the longer you build good history by paying your bills on time, the higher your score will go.

For more ideas on how to improve your financial life, download the free Managing Debt to Improve Your Mental Wealth ebook.

 This article was written by Kim McGrigg and was originally published in November, 2011.

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.