Why is it important for me to pay my bills on time?
It is important for you to pay your bills on time to avoid extra charges and to protect your credit rating. If you do not pay your bills on time, you will end up paying more than you owe because of interest on the outstanding amount. Certain bills, like your telephone and utility bills, must be paid on time if you want to avoid having your phone, water or lights cut off.
Credit reporting agencies keep a record of who you owe, how much you owe, and if you pay your bills on time. This record is your credit report. When you apply for credit (such as a loan or credit card), a creditor will check your credit report. If you pay your bills on time, you will be able to get the credit you need. If you pay your bills late it will be harder for you to get credit and you may pay more for it. Find out more about credit.
What happens if I don't pay my bills at all?
When you don't pay a bill you lose not only money in late fees, you may also lose your line of credit, your possessions or your services. Not paying your utility bills may mean that your water or electricity is cut off. Some credit agreements make the total unpaid balance due if you miss a payment. So, let's say you miss a car payment. You may have to pay the total amount you owe, or the lender can take the car back. Creditors may be able to sue you and require that you pay a specific amount to them. The creditor may be able to get a garnishee order (to take the money or property of a debtor by legal authority), so the money is taken out of your pay cheque each month.