How To Avoid Credit Problems Due To Late Utility Bill Payment

Utility bills are something that many people rarely take seriously when it comes to their credit. However, late utility bill payments can be a major problem if you aren't careful. Thankfully, you can avoid the negative effects of this problem quite easily.

Late Utility Payments Can Impact Your Credit

One thing that few people may not understand is that late utility payments can negatively affect your credit score. While the typical credit score generated by FICO does not take these payments into account, alternative scores do. These alternative scores are sometimes used to help approve someone who's credit is too low to approve otherwise.

While being a few days behind on a utility bill may not affect your credit, being a week more late will start to affect it. Even worse, this history of poor utility payment can actually plague you for years at other utility companies. Moving to a new city and trying to open a utility account may be impossible if you have a history of late payments.

As a result, it is important to do what you can to avoid this situation. Whether you don't have enough money for your utility payments or simply forget their payment dates, there are ways that you can stay on-time with your utility payments and avoid any negative repercussions.

Avoiding This Problem

The best way to avoid this problem is to set up an automatic payment system that takes the money from your account when it is due. In this way, you can never be late for a utility payment, as long as you have the money in your account. One concern with this payment method is that you won't see your bill without logging into your account or inquiring at the utility company.

As a result, this method is not a good idea for those who may struggle to have enough money to pay their utility bills on times. In that case, it is a good idea to find ways to decrease your utility bill. These include simple tips like turning off your electricity when you aren't at home or decreasing the temperature of your furnace during the winter.

By following these simple techniques, you can have up-to-date accounts for your utilities. Even better, you won't suffer from the negative credit effects that can plague those with poor utility history. Make sure to talk to your local utilities companies to learn more about other money-saving methods that you can utilize.