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Automatic Bill Pay and FICO

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Anonymous
Not applicable

Automatic Bill Pay and FICO

A co-worker told me that his score dropped 30 points after he began using autodebit for some of his bills. Can auto debit negatively affect your FICO score?
Message 1 of 6
5 REPLIES 5
Lel
Moderator Emeritus

Re: Automatic Bill Pay and FICO



@Anonymous wrote:
A co-worker told me that his score dropped 30 points after he began using autodebit for some of his bills. Can auto debit negatively affect your FICO score?






I can't imagine how this would affect his score. FICO only looks at whether the bills are paid, not how they are paid.

Is he using a credit card to pay his bills? If he is using a card that was previously idle, then this could result in a temporary drop in score. If by using the credit card his utilization is also higher, then this would drop his score as well.
Message 2 of 6
Anonymous
Not applicable

Re: Automatic Bill Pay and FICO

Welcome to the FICO Forums, tommigrrl!
 
FICO doesn't care one way or the other how you pay your bills, as long as they are paid on time, every time.
 
Automatic billpay systems are notoriously unreliable.  I would guess that what happened to your coworker was that his billpay payment didn't go through for whatever reason, which caused his creditor to put a notation on his credit reports that he missed that month's payment.  This could definitely cause a 30-point drop in one's score, if not more.
 
I would never trust any automatic billpay system to pay all of my bills on time for me.  If I used one of those systems (which I don't), I would at the very least double check and triple check that each payment went through before it was due.
 
Message 3 of 6
MidnightVoice
Super Contributor

Re: Automatic Bill Pay and FICO

I use manual billpay from my bank, but with a first payment on a CC I always send the twice the minimum via snail mail to cover me in case something goes wrong.
 
And I always look and make sure it goes through
 
And I have email alerts for payments that have been made
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Message 4 of 6
mrlimo
Regular Contributor

Re: Automatic Bill Pay and FICO

I too use my credit card to pay for such bills as cable, cell phone, daycare bill etc. I love getting the extra airline miles for something I would be paying for anyways. I notice a fluctuation in my fico #'s due to the practice. However after experimenting with it over the last few months the negative fico numbers are just minimal bumps and should not be worried about unless your looking for a big ticket item purchase like a mortgage. Then you should PIF all cards prior to the closing date a month or 2 in advance from your settlement date on the mortgage. It is not a derog and points can be quickly recaptured if need be by paying off the util.
 
 It is an example of fico and financial colliding. I still practice the same strategy of using rewards cards to pay for my vacations on c.c.c.'s dime while paying for everyday purchases anyways.
Message 5 of 6
Anonymous
Not applicable

Re: Automatic Bill Pay and FICO

FICO couldn't care less what method you use to pay bills...unless, for whatever reason, the bill ends up being paid late.
Message 6 of 6
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