Paying your bills on time is probably one of the most important habits to get into if you want to improve your credit score. As much as 35% of your credit rating is based on your bill payment history. Your credit can take a big hit if you’re constantly late on your bills.
If you’re having a difficult time paying your bills on time, that’s a red flag. It’s time for you to look at your budget to see why you can’t meet the deadline. Is it because you’re over extended? Is it because you have a poor bookkeeping system? Is it because you just forget?
What ever the reason, it’s time to get to the bottom of it and resolve the issue.
Electronic Bill Payment
If you’re paying your bills late because of sloppy bookkeeping or forgetfulness, it’s time to get some help. There are plenty of online sources to remind you to pay your bills. Why not set up an automatic bill payment system whereby the amount due is automatically withdrawn from your account (If you don’t want the money taken from your main checking account, set up a separate “bill” account from which the money will be withdrawn).
If you don’t want automatic withdrawals, take one day per month and schedule your bills electronically. Whether you use a software program like Quicken or your bank’s online bill pay feature, electronic payment scheduling can help you get your bills paid on time and improve your credit rating.
Not Enough Money
If your bills are late because you don’t have the money, you have the option of trying to earn more money, cutting back on expenses or seeking credit counseling help.
It’s not always easy to earn more money. This is a tough economy and folks are losing jobs left and right. However there are options. There are several ways in which to earn money online (be careful because there are plenty of scams) and off line. Maybe taking on a part-time job until you get things paid off is a solution.
In the meanwhile, pull in your belt. Drop the double lattes, cut back on cable channels, paint your own nails, learn how to cook and stop eating out. There are lots of things you can do in the meanwhile to save money.
If additional income and pulling in the belt isn’t enough, then it’s time for professional help. Seek qualified credit counselor. The Federal Trade Commission has information on Choosing a Credit Counselor.
Burying your head in the sand won’t help your credit score (nor will it help your complexion). If you want to improve your credit, you have to take action.