Holy cow. I just read an article that reminded me to be terrified …
If you have a 780 credit score, and you make one late payment, your score could plummet as much as 110 points.
That’s right—your score could drop from 780 to 670 in just a mont
h. That could cause your interest rates to shoot through the roof.
Worse, it could cause you to pay a ton in interest payments.
So this week, I want to focus on the nitty-gritty…
I know that administrative housecleaning isn’t fun for anyone, but you cannot afford to put it off.
Take an hour this weekend to get your bill-paying mechanisms in order. Sign up for auto pay, make sure you know when your credit cards are due, and just make sure that you have a system that protects your credit score.
It might sound simple, but forgetting to pay one bill could be devastating.
Of course, even if you have the best systems in place, money might be tight one month. If you do need to pay a bill late, here are a few things to keep in mind:
- Your utility payments are not included in your credit score unless your account is sent to collections. If you have to make a choice between paying a credit card late or a phone bill late, pay the credit card on time and pay the phone bill late. This will keep your credit score intact.
- Most credit card companies do not report a bill as “late” unless it is past due by more than one billing cycle, which is usually about 30 days. So if your credit card is due August
5, it probably will not be reported as late if you pay it before September 4. Of course, you’ll still have to pay a late fee, but at least your credit score won’t be
hurt!
- And finally, if you cannot pay a bill on time, don’t hide from the creditor. Just call them up and say, “I’m having a tough month. Could you give me a 60-day grace period to make some adjustments to my finances?” They might say no, but if you have been a great customer, they will probably say yes!
That’s it for this week’s blog. It’s short and sweet, but you have some homework …
Buckle down and spend an hour on the “nitty-gritty” by making sure you have a system in place so you pay your bills on time each month.
And if you have an innovate system for keeping your finances organized, I’d love to hear it. Leave a comment below.
P.S. I’m serious. I really want you to share your ideas below. I’m committed to building a financially savvy community, and we need your help in spreading ideas!
Here’s what I do to keep my finances organized:
- First, I make use of technology to pay all my bills. This means that I have “auto pays” set up for every bill, which includes utilities, credit cards, rent, car payments, and the like.
- Then, I have automatic reminders to review my statements on the 1st and the 15th of every month.
- I put all my “bills to pay” mail into a folder, and I review them every other week. I know this might seem simple, but before I implemented this easy step, I had envelopes scattered everywhere—my car, the kitchen table, and my desk. It made it tough to stay on top of the administrative stuff.
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Since I have a busy life like everyone else, I had to create a filing system that worked for ME and my MY busy schedule. You cannot become impatient or tired in the quest so don’t stop until you perfect a system that works for you. (What works for someone else more than likely will not work for you.)
For many years I worked as an office worker in various capacities which gave me an opportunity to watch how and why there needs to be a filing system to keep everything in order. I functioned as the person that kept all those papers in order. So I drew from my prior experiences.
I tried several systems and combinations of systems until I perfected one that worked for me.
{Prepare to give up some TV and telephone time) which is more important?
I purchased a plastic a file folder container and file forders. I labeled each file folder to match each bill and stapled a sheet of paper with all the details about that bill on it, account #, due date, phone #, time of operations, the physical monthly bill, and any other important information about that bill. Include your user name and password so they are at your finger tips.
Next, I then went to technology, I enrolled each bill in auto pay. Changed my due date if necessary to fit my pay days, so I would not come up short when the bill became due.
I look at my bills on the computer every week to make sure I am on top of them, checking for any errors and offers that might meet my financial needs. If I see something questionable, I call and get an answer.
(this process should become a passion not a meaningless undesireable job)
This keeps me on top of my bills, and hopefully it will inspire you to get your business in order today.
Thanks for the encouragement. I am old school and I still pay by check. I haven’t quite trusted the pay system because I have heard war stories about paying on line. Pray for me for the transition and I am always encouraged by your email.
God Bless
Have a great day!
My husband and I give ourselves an allowance each payday for miscellaneous things (dining out, garage sale stops)- so we never dip into our primary account for anything that is not a true bill. We have a binder that we keep track of all of our bills in. The day after our direct deposit we log into our bank account and check off each item to make sure its has come out of the account on time(similar to your every other week method). Then we project for a month out what is expected to automatically come out (check and balance). If we have to phone the company about something we get a name and ext #. We have zero credit cards, we do everything by cash now, too much money tossed out on interest payments!
The whole idea of zero credit card is wonderful, for you to be in that position it is really freedom. Keep telling your story. Thanks.
I mark each envelope (on the short side) with the name, date due and amount at the top. The date due is one week before it is actually due. These are placed, in order of due date, in a spiral file holder (or an old vinyl record holder!).
Then I place the same info (minus the date) on the respective day my calendar. I also include the checking account it will automatically deduct from, if that is the case.
I care for an elder and pay her bills, my personal bills and my business bills. I’d be lost w/o this system.
It also allows me to forget about bill paying because I know at glance what is due. In fact, at the end of every month, I fill out the calendar for the next month with the bills and add their amount due as they come in.
Works.
(Get rid of that annoying pop-up! Once or twice is MORE than enough!)
this is good, lets you know in advance what to take care of first, lets the paid things drop off. Or brings to light the things which need to be paid.
You’re right about the popup, with a handheld its nearly impossible to write a nice statement, it wont “close”.
thank you.
God bless you for helping an elderly person with a system that you have found that works. When my mother became elderly, I had to find a system to help her pay her bills on time with a monthly calander system so she could see it for herself and feel I had taken her independence from her.
{please, please give us a break from so many pop-ups)
Keep the good work up.