(NC)—Millions of Canadians are putting their credit ratings at risk and throwing money away on interest and late fees on missed bills, according to a survey by TD Canada Trust.
Half of Canadian adults admit to having missed bill payments and many don't realize that there can be big consequences if you regularly pay bills late.
“Paying bills late or missing payments altogether will damage your credit rating and make it difficult for you to borrow money in the future for a real emergency or opportunity,” says Raymond Chun, Senior Vice President, TD Canada Trust. “Banks and other credit-granting companies look at past performance on bill payments as an indicator of future behaviour, so it's important to always pay your bills on time.”
Chun offers his advice on how Canadians can take control of their day-to-day bill payments to safeguard their credit ratings:
1 Automate your payments—The easiest way to maintain a strong rating is to pay your bills on time. Set-up pre-authorized debits from your chequing account for your regular bills like utilities and rent and automatic transfers to cover your credit card's total balance each month so you can be sure to never miss a payment. There are usually instructions printed on each bill for how to register for pre-authorized payments.
2 Pay at least the minimum—If you're strapped for cash one month then pay at least the minimum required. If you find yourself in way over your head and can't make your bill payments each month, then talk to your bank about possible ways you can get help.
3 Embrace online banking—Receiving bills by email or viewing them online can be easier to keep track of than paper statements so they don't slip off your radar. For people who like to maintain their own records, in most cases, you can save the copies to your desktop or to an external storage device. Paying bills online means you can avoid the hassle of envelopes, cheques and stamps. If you sign up for mobile banking, you can pay your bills from anywhere anytime using your cell phone.
Credit ratings are dynamic, which means every time you make or don't make a bill payment on time you are building your credit history. One slip up is added to your tally and can affect your credit rating for up to seven years. Taking control of your day-to-day bill payments will help safeguard your credit rating and ensure you have a good credit score when you need it.