The common census is that it is always better to pay your bills early. You do not know what may happen in the future, so it is best to be prepared. Paying your bills early can also reduce your stress.
You can plan out how much you need to put aside for your bills every month. In this manner, you can build a budget that will allow you to spend and save your money. It will also add to your credit score.
There are many advantages when it comes to paying your bills early. They are :
- Not incurring late fees
- Qualifying for rebates and special discounts
- Scoring high on FICO
Does Paying Bills On Time Improve Credit?
Paying your bills on time will help boost your credit utilization. It will also establish a good credit record. You can improve your FICO score. FICO scores range from 300 to 850, so the higher your score is, the better you fare.
Most financial institutions use FICO scores before approving a loan or a credit card application. Experian, Equifax, and TransUnion are three main credit bureaus that take note of your creditworthiness.
If you have a consistent record of early payments, your chances of getting approved are high. In addition, you can also get low-interest rates when your credit is good. Utility companies and even landlords also use FICO scores to check on your reliability to pay.
What Is the Day Of The Month Best To Pay Bills?
Usually, bills are due on the 1st or the 15th of the month. Therefore, it will be helpful if you can first note down the days when the payments are due. You can then get a rough idea of how much needs to be set aside each month.
Once this is done, you can set a date to settle your bills as soon as your paycheck comes in. You can also coordinate with bill collectors to change dates that will suit you. Most often, there is a 15-day grace period that you can work around.
Should You Pay All Of Your Bills At Once?
Bills arrive on different days, and it is difficult to keep track of all of them. Therefore, you need to have a specific day for payments to make it easy to manage your payments. This will help you budget your expenses and manage your money better.
There are many advantages to paying all your bills at once. First, it reduces stress as you are always ahead of payments. It saves you time and makes you commit to a payment schedule. Finally, you will always know exactly how much cash you have in hand.
Is Paying Bills Early A Good Idea?
Usually, paying your utility bills early is a good decision. You can then concentrate on all the other miscellaneous expenses. You might also qualify for discounts and rebates when paying these bills early.
But you need to be careful when paying off credit cards and other loan payments early. First, you need to be aware of any charges that may be applied. Therefore, you may have to consider which bills you pay early and which you can postpone till they are due.
What Are The Cons Of Paying Bills Early?
You should be attentive to how much you need to set aside each month for your bills. You might pay all your bills but then end up having to borrow money for your day-to-day expenses.
Depending on your paycheck and when you get paid, you need to allocate an appropriate amount for payment. Credit cards and loans are the two most important payments you need to watch.
When paying credit cards early, you need to make sure you pay during the correct billing cycle. Since most payment systems are automated, an early payment for one month may be taken as two payments for an earlier month.
When this happens, you will be charged a late fee and even have a high-interest rate to pay. Therefore, you need to be vigilant about this and check your statement for the correct date when the payment is due.
Settling off loans early can also be problematic. You might be charged prepayment penalty fees. This will offset any savings you might hope to make by paying early.
Final Thoughts on Is It Better To Pay Bills Early Or On Time
At the end of the day, paying your bills is a necessity. You can pay when you like or plan a schedule and pay early. It all depends on how well you organize your finances.
There is a bigger benefit to paying bills early. Using the technology available, you can easily make a digital payment or set up a scheme that does it for you. The key factor is to find a system that works for you.