Being late for work, to meet a date or for a dentist appointment can all be a bit stressful but definitely isn’t the end of the world. On the other hand, if you’re late paying your bills you should definitely be worried because if you do it long enough you could badly damage your credit, something that might take you years to repair. In fact, a single bill past-due for 30 days or more can drop your credit score by as much as 100 points!
Of course, just like being late for work (or for that date) there are plenty of excuses that people use for paying their bills late. The problem is, none of these are going to keep your credit score from taking a shot to the jaw and making things financially difficult for you. Better to figure out why you’re paying late and then use the advice and info we have for you below to get back on track.
Excuse 1 – I’m broke. The excuse that many people use is that they just don’t have the money to pay a specific bill. The fact is, if you’re spending more money than you’re earning there is no way you’ll ever catch up unless you adjust either the amount you’re spending or the amount that you’re earning. In some cases however it just might take a little bit more planning on your part to make sure that, at the end of the month, you have enough money left over to pay the bills.
In some instances a great fix for this would be to simply shift the dates that your bills are due on, something that many credit card companies will allow you to do. Once you have your bills shifted so that you can pay them off during the month rather than all of them at once, you’ll be able to better plan where and how to spend your money and make sure that you don’t fall behind on a payment because you were broke.
Excuse 2 – I forgot. As far as the number one excuse that people use, simply forgetting to pay is it. Over 60% of people who have paid a bill late have blamed it on the fact that they simply forgot to pay it. This isn’t so hard to understand when you realize that, today, the average homeowner could have over 2 dozen or more different bills to pay every month.
Creating a simple master calendar of when bills are due and putting it up in your home office is a great idea. Of course that’s a bit old-school. Today, with tablet and smart phone apps, you can easily set up a reminder system that will work with your smart phone, tablet, email and other communication devices to send you ample amounts of reminder notices.
Many credit card and financial institutions will also send you an email automatically when your bill is due and, if they aren’t, you might want to give them a call and find out if you can set it up. There are also a number of newer cards, for example the Citi Simplicity card that don’t charge late fees or charge you a penalty interest rate. With these cards you won’t be getting any cash rewards but the fact is that, if you get smacked with a $35 late fee, any rewards that you might have earned are going to be wiped out anyway.
Excuse 3 – I don’t know where my bill is. One excuse that is all too common is that of not getting a bill to begin with or not knowing where your bill is. When you consider that the average consumer gets approximately 11 different pieces of mail every day, it’s easy to understand that a bill might get lost or misplaced. When you add in the fact that many people are very unorganized with their bills (you know who you are) and leave them all over the house, not knowing exactly where a bill is becomes a definite problem.
The cure for this is simply having some type of system to handle your incoming mail. An inbox or ‘ bills to pay’ box is a great idea as well as using a magnetic dry erase board to literally hanging your bills on every month. With this system you can use a dry erase marker to actually write the due date above the bill in big, bold numbers that are hard to miss.
Another way to avoid this problem completely is to set up automatic payments that are taken directly out of your savings or checking account. With this system there’s never a worry that you have lost your bill or have forgotten it because your credit companies big, expensive computer is doing the work for you.
In fact is, with all of the devices that can be used to help remind you about paying bills, including apps, email, alarms and so forth, there’s really no excuse anymore for paying a bill late besides being flat broke. (And believe us, if you are flat broke we feel for you.) When it comes to credit, the only thing that excuses will bring you is a lower credit score and a lot more stress, headaches and financial problems. Unlike your math homework, telling your credit card company that your dog ate your bill is an invitation to financial trouble the you’d really best avoid.