3 Reasons Paying Your Bills Early Will Benefit You

If there’s anything we all learned from 2020, it’s that things can change in a heartbeat and that the unexpected can create real havoc. Though there’s nothing you can do to stop fate’s freight trains from barreling down the tracks, there are steps you can take to minimize the stress you feel in its aftermath. One of those steps is both simple and remarkable in the power of its impact: Start paying your bills ahead of time, before they are due.

At first glance, it may seem like paying bills early won’t change anything. But there are three important ways that it makes a big difference.

1. Boost your FICO® Score and your reputation while lowering your anxiety.
Have you ever found yourself unable to log on to your credit card’s payment site on the day that a bill was due? Not only will paying early eliminate that nightmare from your life, but at the same time it will lift your FICO® Score. More than one third of your credit score is based on whether you pay your bills on time, so getting into the habit of paying early can help a lot, especially if you’ve fallen behind in the past.

The other benefit that you can get from paying bills early is the boost you’ll give to the way your creditors view you. It’s known as a “halo” in the credit world, and though you may not think it makes a difference one way or another, imagine having always paid your rent ahead of time and then suddenly finding yourself short on funds, with a paycheck due two or three days after the rent’s due date. By having established a shiny halo for yourself, you have a much better chance of your landlord being willing to give you that two-or-three-day grace period that you need. And the halo isn’t limited to face-to-face creditors – it will also help you when it comes time to apply for a loan, as one of the first things a bank will look at within your credit score is your payment history.

2. Paying bills early costs less.
If you’ve ever paid your bills past their due date, then you immediately know one of the ways that paying early helps: You eliminate the additional expense imposed by late fees. But in addition to avoiding that penalty, there are also significant incentives and rewards available for those who pay ahead of time.

For one thing, eliminating late penalties will automatically lift your FICO® Score, and that means that you will likely qualify for lower interest rates on any loans you apply for, saving you plenty of money over the long term.

Additionally, there are some creditors who o