5 ways to stay on top of your bills

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5 ways to stay on top of your bills

You know you're supposed to pay your bills before they're due, but sometimes, life gets in the way and your payment doesn't quite make it in time. You're not alone - according to our data, approximately 38 percent of Credit Karma members have had at least one late payment in the past seven years.*

Why does it matter?

Late payments have the potential to torpedo your credit score faster than a sinking ship. About 35 percent of your credit score is based on your payment history, which makes it one of the most important factors of your overall credit health. Fortunately, you have a lot of control over this area. We've collected a few general tips to help you stay on top of your bills.

1. Follow a budget.

Knowing how much money you have coming in, and how much money you have going out is essential. By creating a budget, you'll be able to spot times where you might come up a little short financially, and plan accordingly. It's also good to budget in cushioning for fluctuating expenses like your utility bills and gifts.

2. Schedule automatic payments.

Whether it's your credit card, mortgage or even insurance payment, almost all bills can be paid online these days. If your provider takes online payments, you may be able to log on to your provider's website and schedule payments well before the due date. If you link your debit card, the payments can be made each month with no further action on your end. Of course, for this strategy you would need to have enough cash in your checking account to cover your payments. Some companies even offer incentives, like a small discount, for scheduling automatic payments.

3. If feasible, pay your bill as soon as it is received.

Online, over the phone or through mail - whatever works best for you. Paying immediately is a good option for accounts where you cannot set up recurring, automatic payments as it reduces the potentially disastrous chance of re-discovering the bill after the due date.

4. Set reminders.

You could keep it old school and use a paper calendar to keep track of due dates, or choose from a bevy of financial apps to receive electronic reminders of your bills and financial obligations. You may also enable bill reminders through Credit Karma's free account monitoring service. If you'll be mailing checks, leave yourself some wiggle room for the transit time - generally speaking, one week should be plenty.

5. Adjust your due dates.

Some accounts, particularly credit cards, let you choose your own due date. If all of your bills are due the same week, money could get a little tight. It might be helpful to schedule your due dates closer to payday, or spread them out throughout the month, depending on your cash flow.

Bottom line

It's important to keep your credit in shipshape by paying all of your bills on-time. To recap, you may find it helpful to begin following a budget, taking advantage of automatic bill payment services and setting reminders to help you stay on top of your bills. While paying your bills on-time is critical to your overall credit health, you also generally want to take care of the other components of your credit score such as credit card utilization rates, hard inquiries and derogatory marks.

*Calculations are based on data pulled from the most recent available reports of 20 million Credit Karma members through July 2014.

About the author: Kayleigh Gaddor is the Community Manager at Credit Karma. Not content to stay in one place too long, she's most recently traveled to Hong Kong, Scandinavia and Hawaii. An avid reader and proud introvert, Kayleigh can usually be found with her head buried in her Kindle.

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All Comments

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2 Contributions
60 People Helped

Helpful to 48 out of 51 people

I will have to respectfully disagree that payment history has a major impact on my score, at least on CreditKarma.  I have 488/488 payments shown on time (in other words a perfect payment history), and the stats are that my percentage of ontime payments is "100% higher than the rest of the country."  Yet my credit score, according to CreditKarma, still ranges in the low 600's and is "Poor."  I am beginning to think CreditKarma shows a falsely low credit score so that you will keep using their site.  I was recently approved for an American Express Every Day card with a $6500 limit and qualified six months ago for a home mortgage with a phenomenal interest rate.  My scores on this site are consistently far lower than on another site which monitors my credit and my identity monthly for a fee, and is supposedly using the same score providers.  I'm not talking a few points either.  I'm talking being consistently in the low 600's here, but with scores hovering around 700 at the "paid" site. A 700+ score was confirmed when I purchased my home. That is considered "good" to "very good" everywhere but here.  What gives with that?

Top Contributor

Reply by
TeamCKJen

366 Contributions
641 People Helped
Helpful to 13 out of 17 people

Payment history can have a major impact on your credit score, but so can several other factors including how much credit you use, derogatory marks, the age of your credit history, how many accounts you have and how many hard inquiries are on your report. As for the difference in your credit scores, you may find this article helpful - https://www.creditkarma.com/article/differentscores. 

Reply by
ToniKaye

1 Contribution
12 People Helped
Helpful to 12 out of 13 people

Enter Your Reply

I never thought about why Credit Karma's score is always lower than Equifax but it is indeed substantially lower. 

Reply by
urhoneybeeyl

4 Contributions
4 People Helped

payments on time improve your FiCO score you can ask your bank to tell you your fico your allowed a free one every year i think!!!! thats why american express gave you a card your payment history you just have to pay your balances off every month 

Reply by
sirthomasknight

1 Contribution
0 People Helped

Enter Your ReplyI agree with you , why is credit karma showing much lower score than your actual score

Reply by
pelican01

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0 People Helped

I agree. I had a 100% for years and it never seemed to make a difference.

Reply by
rcgonzo1014

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0 People Helped

Enter Your ReplyYour home score is a completely different score than the normal credit impact score

1 Contribution
77 People Helped

Helpful to 77 out of 86 people

I log the due dates of all my bills and the amounts and figure out how much money needs to go out to pay bills every payday. I always leave a little cushion available for savings, fuel and biweekly lawn maintanence. I keep a hand written list in my desk drawer that I look at often and I have created a spreadsheet that I can print off and mark off as each bill is paid.

Reply by
writerwoman101

3 Contributions
24 People Helped
Helpful to 24 out of 29 people

Thanks for your suggestion. my only mistake and you have correctedit for me -- is not to include a due date on my spread sheet monthly budget. Thanks for the heads up.

2 Contributions
22 People Helped

Helpful to 22 out of 22 people

Pretty sound advice. One thing I do differently with setting up auto pay is that all the payments are originated from my financial institution's website. That way, Joe's Credit Company can't autowithdraw from my account. I have control over the payment dates. Another good trick is to schedule payments every two weeks (payday, for me) which over time, puts you ahead of schedule with accounts you're paying long-term.

Credit Karma Team
Top Contributor
2949 Contributions
5282 People Helped
Helpful to 2 out of 2 people

Thanks for posting!

Reply by
ModMother

1 Contribution
1 Person Helped
Helpful to 1 out of 2 people

This is a really important point. It helped me very much to set up my auto pay this way.

Top Contributor
52 Contributions
540 People Helped

Helpful to 22 out of 26 people

I am slowing setting up auto pay for my bills.  Just a bit reluctant since I had a bad experience with my security system bill.  They decided to take out twice the monthly amount and that kind of stopped me from putting the rest of my bills on auto pay all at once.  I do keep a list on my pc with the dates they're due and If I have scheduled a payment.  It does keep everything paid on time.  Thanks for the advice.  I started with no credit and now have a mtg, auto pymt, 10 cc's.  Paying off all cc's now and trying to get in the 760 club thanks to all of your advice!

Credit Karma Team
Top Contributor
2949 Contributions
5282 People Helped

Helpful to 26 out of 36 people

Thanks for sharing! That sounds like a great way to stay organized. 

1 Contribution
5 People Helped

Helpful to 5 out of 6 people

Not to promote another product on your website, but I use YNAB - www.youneedabudget.com. The budget system for YNAB is wonderful. I also have the majority of my bills on autopay, and use GMail's Inbox-reminder feature to remind me to pay those that don't have auto-pay.

Credit Karma Team
Top Contributor
2949 Contributions
5282 People Helped
Helpful to 3 out of 3 people

Thanks for posting. That is a very highly regarded budgeting tool. 

1 Contribution
6 People Helped

Helpful to 6 out of 8 people

how can i change a negative mark on my credit that is not true it shows that i have a late payment on a account i have never ordered from and just got a three hundred dollar credit account card from but have never ordered from

Credit Karma Team
Top Contributor
2949 Contributions
5282 People Helped
Helpful to 3 out of 6 people

Hi Helenu,

Have you contacted the creditor directly? They may be able to help you resolve this issue. 

1 Contribution
1 Person Helped

Helpful to 1 out of 1 people

I have a couple of charge-offs on my report, if I pay these charge-offs will this improve my credit score?

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Reply by
TeamCKJen

366 Contributions
641 People Helped

It would depend on the particulars of your situation. 

1 Contribution
4 People Helped

Helpful to 4 out of 7 people

How long do late payments remain on your credit?

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Reply by
TeamCKJen

366 Contributions
641 People Helped
Helpful to 15 out of 18 people

Late payments may stay on your credit report for around seven years after the first delinquency date. 

2 Contributions
0 People Helped

I have been paying my payments on time for the last 2 to 3 years and my payment history each mont always shows a 10 payment difference between late and on time.  My percentage will always show 96.4%.  How do I improve from here%

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