Increase Your Credit Score - Pay On Time

November 3, 2019


Saving money with a boost to your credit score has gotten easier than ever.  When you pay "on time" there are no late fees, and timely payments can increase your credit score with no 30 Day late payments, and may even increase your credit line or limit.  If you routinely pay late, the opposite is true and your credit score may be taking a hit.


Pay On Time:


The creditors to whom you owe money want their bills paid on time.  They send out monthly statements with a due date on the bill.  The payment date shown is not a suggestion.  It is a drop dead date before they impose penalties on the money due.  Late payments of even one day subject you to whatever fee your creditor decides to impose for breaking the rules. Some companies don’t charge much, maybe only $10. But if you pay a credit card even one day late, that amount jumps to $35 or more, and paying a few bills late every month can easily amount to $100.  


Some people are "divorced" from their money. They don't know how much comes in and even less about how much goes out. They only pay bills when a late payment notice appears - not because they don't have the money, but because paying bills is not a priority.  That way of thinking is financial suicide!  The objective of money is to receive value in exchange.  Late payments throw money down the drain and in the process convince creditors you’re not “worthy,” so they impose even higher fees and increase interest rates.


On-Time Strategies:


1. If you’re enrolled in paperless billing, it's time to stop. It's easy to dismiss an email     especially when you receive hundreds each day.  Receiving bills through the mail serve as a physical reminder a payment is due.

When you receive a bill, put it in a place where it cannot go unnoticed, organize by due date - or better yet, pay it immediately.


2.  For payments on an ongoing basis try auto-pay offered by your bank or creditor.  Set it up such that the bill is paid 5 to 7 days in advance of the due date to eliminate the chance of it being received late.


3.  Too many little bills?  Consolidate by having them billed to a credit card - ONLY if you can do so without fees. Better tracking.  Fewer headaches.  No late fees.  And possibly adding to your "rewards" depending upon the card you carry.


4.  Set aside two days each month to pay your bills to coincide with your paydays.  Pay your bills first. Whatever is left is yours.


5.  Have you fallen a little behind? If that's the case do not pay all of your bills late.  For example if you have 10 bills due each month, pay 1 through 9 on time and pay the       10th late. This strategy is a cost saving measure to avoid late payments and fees.  It     won't take care of the problem which is a shortage of cash. To get your finances back in order you need to cut your expenses and or take a part time job. 


Late fees are always a waste.  Money spent with no value received.  Once you start paying “on time,” you'll have more money in your budget - and if your credit has been affected, it will gradually improve.


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Karen Peyton, Associate Broker

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Karen Peyton, Associate Broker 



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