Reason why you should pay Gas & Electricity Bills regularly in 2022

Obtaining utility services such as gas, electricity, and water is highly dependent on your credit history. The better your credit history, the more easily you can obtain services. Additionally, your on-time (or late) payment history with utility providers can have a bearing on your future credit history.Is It Possible to Improve My Credit Score By Paying My Utility Bills?

Credit scores can be improved in a variety of ways, but simply paying utility bills on time is rarely sufficient. While people pay utility bills such as gas, electric, and water, the information is not reported to credit bureaus and does not appear on an individual’s credit report. On the other hand, loans and credit cards, including repayment history, have a significantly greater impact on a person’s credit score.

Sometimes. Because you’re paying for services rather than repaying a line of credit, most utility companies will not report your payment history to the three credit bureaus. However, utility companies and landlords are very likely to hire a collection agency to pursue unpaid bills, and collections are reported to the credit bureaus. If you are unsure whether your electricity or gas company reports to credit bureaus, you can contact them or request a copy of your credit report to check for any recent activity or delinquencies.

Paying your bills on time is critical to regaining control of your financial situation. Knowing when your bills are due and developing a habit of paying them on time can alleviate stress, save you money, improve your credit score, and enable you to qualify for future low-interest credit.
Taking control of your bills can also help you maintain a healthy checking account balance by coordinating bill pay-by dates with your paycheck or other sources of income.

The Advantages of On-Time Bill Payment
Paying bills on time makes sense, doesn’t it? Early payments eliminate the need to deal with late fees, tricky fees, and the stress of making payments on time. Apart from the obvious benefits of paying your bills on time, there are additional reasons to make early payments.

Discounts

Paying bills in advance can sometimes result in discounts, depending on your service provider and location. In New York City, for example, if you pay your property taxes early – the property tax portion of the “Everything You Owe…” amount on your Property Tax Bill – you will receive a discount on your annual taxes. In Marietta, Ga., customers who receive service from Marietta Power & Water and pay their bills within ten days of the billing date can receive a 10% discount.

Additionally, you may be eligible for a discount if you pay your healthcare provider early or within a specified time period. Consult your service provider or local government agency to determine what types of discounts you may be eligible for.

Increasing your credit score
Although you will not earn bonus points for making an early payment on a credit card bill, paying bills on time is a surefire way to build credit. As long as you pay your bills on time each month, your credit score will remain unaffected.

Interest reduction
If you accumulate debt on your credit card and only make the minimum payment each month, you are effectively paying off the interest. If you continue on this payment plan, it will take many, many years to pay off your debt. Interest is calculated by credit card companies based on the average daily balance. This means that the higher your daily balance is, the more interest you will pay.

Thus, paying off a larger portion of your credit card balance sooner will result in lower interest costs in the long run. The same is true for car loans and mortgage payments. The sooner these bills are paid off, the better. And every little bit helps, so don’t be discouraged if your monthly contribution is only a few dollars more. Savings will accumulate over time.

Note: If you choose to pay your bills early, make certain that your payment is applied to the new billing cycle. Certain businesses may apply your early payment to your previous billing cycle, which may come as a surprise when you receive a notice that your account is past due. Make your payment on the first day of your new billing cycle to be safe. You can determine the start date of your new billing cycle by logging into your account online or calling customer service. Additionally, consider setting up automatic bill payments so that the amount is deducted from your account each month.

Tax credit for making your December mortgage payment early
In contrast to rent, which is typically paid at the beginning of each month, mortgage payments are made at the end. If you make your January mortgage payment by the end of December, you can deduct the interest on your mortgage in the current year and apply it to your tax deduction for that year. Your January mortgage payment will include the December interest payment. To accomplish this, ensure that your payment is credited as an annual interest payment. You may wish to call the mortgage company to inform them and seek advice. Nota bene: this method is only applicable to paying your January mortgage in December.

Providing a cushion for yourself
Paying bills on time provides you with some breathing room in case something goes wrong with your payment. Occasionally, errors occur: your check may be lost in the mail or your online payment may take several days to post to your account. By paying your bill early, you can avoid the late payment penalties.

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