Paying your bills is all part of responsibly managing your finances, even though it might not be a particularly fun exercise. It’s something that we’re all expected to do but there are also some benefits in the long term for you personally of learning how to settle all your accounts when they become due.
A bad credit rating
If you begin getting into trouble with bill payments then this will start showing up on your credit rating. Although this might not bother you in the short term, it could affect whether or not you can get credit in the future – from something as simple as a credit card to getting a mortgage to buy your first home or taking advantage of the Government Help to Buy schemes if you want to get on the property ladder. Once you have damaged your credit rating then it’s very difficult to set it right again so it’s really not worth taking the chance.
A good credit rating
On the other side of the coin, if you are able to pay bills on time over the long term, particularly if they are bills that relate to paying off expenses, such as credit card debts or loans for equipment or a car, then you will be able to build up a really positive credit profile that will be really attractive to future lenders. This is because credit ratings depend on a demonstration of your ability to successfully handle your debts and credit – so, for example, if you have never had any debts or bills then you won’t have much of a credit rating to show for it, whereas if you have had debt and successfully paid it off – or even just regularly made the required payments – your credit rating will be positive.
A good account
When you regularly pay all your bills on time you essentially build up goodwill with the business to whom you’re making the payments. Whether that’s your mobile phone provider, the local council, the bank that has loaned you money or an energy company, if you have a positive history of good bill paying then you are viewed as a much more valuable customer. This can come in useful in a number of ways, such as being offered discounts or the best deals on products and services as a result of your ‘good behaviour.’ You’re also much more likely to find that a company will be more flexible if you do have a bad month and need to make some adjustments. For example, if you regularly make your credit card payments on time and then miss just one, you will usually find the card company more willing to waive any charges for the missed payment if you have previously always paid on the right day.
Paying your bills on Time is Important for the long term
These are just some of the reasons why it’s a really good idea to make sure that you pay your bills on time in the long term. It might be tempting to skip a payment so that you can use the money for something better this month but it can have a serious effect on your finances in the future.