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From mortgages to car payments to cellphone bills, most of us probably have more monthly bills than we’d prefer.
Because many creditors share your payment information with the three major consumer credit bureaus — Equifax, Experian and TransUnion — falling behind on your bills could negatively affect your credit scores.
Making late payments could also lead to late fees and penalty (higher) APRs on credit cards. Read on for some tips that can help you make your payments on time.
1. Make a list of every bill
Identifying all your creditors, vendors and service providers can be a good place to start.
Check your credit reports and list every lender (leave out accounts that are paid off). Next, review recent bank and credit card statements to add any recurring obligations, such as gym memberships or cellphone bills, to your list.
Your list should include the lender or service provider, the minimum monthly payment and total balance due.
2. Find out when your payments are due
Once you’ve got a list of bills to pay, find out when each bill is due and add that to your list. If your due dates are all over the place, you may want to tweak them to make tracking payments easier.
Many creditors allow you to pick or change the date you pay, so go online or call to find out.
3. Add your payments to a calendar
Tracking your bills’ due dates through a calendar or other system can come in handy. For example, if you use an online calendar, you can add payments there.
4. Decide how much you want to pay
For some of your bills, you may have to pay a set amount. Others — including credit cards — may allow you to pay as much or as little as you want after making the minimum monthly payment.
Ideally, you’d pay the full balance due on all your bills every billing cycle. This may not always be possible. But for accounts that allow you to carry a balance, you may decide to pay more than the minimum to help you save on interest, avoid building up unnecessary debt or potentially become debt-free faster.
5. Set up automated payments whenever possible
Armed with your list and your calendar, it’s time to set up your payment system. One approach is to pay as many bills as possible automatically. When you set up automated payments through creditors, you can specify whether you want them to debit the minimum due, the full balance due or another amount (if the accounts allow it).
6. Devise a system for manual payments
For those bills you pay manually, you can set up a separate system.
- Pay your bills immediately. If you take this approach, the goal is to pay the bill right away.
- Pay your bills on a certain day each month. Set aside a regular, recurring time to pay your bills.
7. Sign up for reminders
Whether you autopay or handle bills manually, it’s helpful to be reminded when bills come due. You can remind yourself to make a payment or to check if an automatic payment cleared.
Your own calendar reminders may be enough. Another approach is to use a specialized app for organizing your money and reminding you about bills.
By developing a system and sticking to it, you can make paying your bills on time easier. It may seem like a lot of effort, but it’s worth it to help maintain good credit scores, which can help you qualify for favorable rates if you borrow in the future.