How to Improve Your Payment History

Quick Answer

You can improve your payment history in a variety of ways, including setting up autopay, avoiding underpayments and setting reminders.
A woman sitting on the couch holds a receipt and uses her laptop while documents and a calculator sit on the table.

Your record of paying debts on time, as agreed under the terms of your loans or credit cards, is the single most important factor used in calculating your credit scores. So maintaining a pristine payment history (or rehabbing a spotty one) can help improve your credit standing over time. Here's how to improve your payment history and help boost your credit scores.

How Payment History Affects Your Credit Score

Payment history is the single biggest factor that contributes to your FICO® Score , the credit score used by 90% of top lenders; it's responsible for about 35% of your score.

That means establishing and maintaining a spotless record of on-time debt payments is the single most important habit you can adopt to promote a strong credit score. It also means that—except for major credit missteps such as allowing unpaid bills to be turned over to collections, foreclosure or bankruptcy—nothing hurts your credit score more than a late or missed payment.

For the purposes of your credit reports and the credit scores based on them, a late payment is one that's 30 days overdue—and the first time one appears on your credit report, it can cause a significant drop in your credit score. Late payments typically remain on your credit report for seven years, but their effect on your credit scores wanes over time.

While lenders won't report payments made a few days late to the credit bureaus, they may charge you a penalty for missing the due date, so there's ample reason for getting your bills paid on or before their due date.

Which Bills Count Toward Your Payment History?

The types of accounts considered for credit payment history are those that involve repaying borrowed funds, including:

  • Credit cards: Paying your minimum monthly payment before the due date is essential to keeping your credit card account in good standing. Making payments greater than the monthly minimum can help you save on interest charges and potentially boost your credit score, and paying on time will spare you late fees and penalties.
  • Other revolving credit accounts: Personal lines of credit, home equity lines of credit (HELOCs), and any other accounts that let you borrow against a set credit limit and charge interest only on the funds you use are known as revolving accounts. (Credit cards are revolving credit too.)
  • Installment loans: Credit reports track payments on all installment loans—those with fixed monthly payments, such as mortgages, student loans and auto loans. When you finish making payments on an installment loan, it will be noted in your credit report as closed in good standing, but its payment history will continue to benefit your credit until the loan is removed from your credit report, usually after 10 years.
  • In-store financing: If a merchant such as a furniture store or electronics retailer lets you buy an item on a payment plan, that's another form of installment credit. The merchant (or the finance company they work with) may report your payments to the national credit bureaus, so they'll show up on your credit reports and can influence your credit scores.

Non-Debt Payments (Usually) Don't Affect Payment History

Payments for expenses unrelated to borrowing money such as rent, utility and cellphone bills, don't automatically influence your credit standing the way debt payments do, but they can affect your credit scores as well:

  • Few landlords and property managers do so, but they can report rent payments to the national credit bureaus—and if they do, rent payments may be incorporated into your payment history. Recent versions of the FICO® Score and VantageScore® scoring models are designed to consider rent payments if they appear in your credit reports.
  • If any bill you fail to pay is turned over to a collection agency, a collection account will appear on your credit report and will adversely affect your credit scores.
  • Enrolling in Experian Boost®ø for free can incorporate your history of utility, cellphone and streaming service payments into your Experian credit report, and a record of on-time payments can increase your FICO® Scores based on Experian data.

5 Ways to Improve Your Payment History

The following tactics can help you maintain a solid payment history, or start rehabbing one that's a little spotty:

  1. Pay on time. This may seem obvious, but the key to a solid payment history is paying your bills on time, every month, without fail. Late payments in your past can't be taken back, but their effect will diminish with time, so if you move ahead without new missteps, your credit scores and standing will tend to improve.
  2. Dispute misreported payments. If you made late payments in the past, you just have to live with the consequences—but if you believe your credit reports mistakenly list on-time payments as missed or late, you should consider contacting your lender or going through the credit report dispute process. You may have to furnish the credit bureaus (Experian, TransUnion or Equifax) with evidence of the inaccuracy.
  3. Avoid underpayment. Late payments are the biggest potential blemish in your payment history, but payments that fall short of the required amount could also mar your credit history. It is better to pay something every month if you can't make a full payment, but underpaying does damage too. If you have trouble making your credit card payments, avoid using those cards and focus on paying down your balances, at least until the required minimum payment is within reach. On installment loans such as mortgages, car loans and student loans, if you're having trouble making your full payment, consider reaching out to your lender—ideally before you send in an underpayment—to see if you can work out new terms that lower your monthly obligation. If the lender approves a new financing arrangement, you'll likely pay more in interest over the life of the loan, but that could be a good trade-off for preserving your payment history.
  4. Establish a bill-paying routine. If you have trouble remembering to pay your bills each month, scheduling a regular day for all your bill payments can be helpful. Pick a time and day that works for you—the last Sunday of the month, for bills due in the month ahead, for example—and put it on your calendar.
  5. Let technology help. Most financial institutions let you schedule automated electronic bill payments (autopay), which is a great tool for avoiding late payments. Other tech tools that can help you avoid late payments are digital calendar reminders, alert features found in many credit card issuers' smartphone apps, and even virtual sticky notes. Any tech you're comfortable with that stops you from forgetting a payment is a win for your finances and your credit.

Benefits of Paying Your Bills on Time

Getting in the habit of paying your bills on time can pay off in lots of ways:

  • Help improve your credit scores. Making all your debt payments on time can go a long way toward helping you build good credit. Lenders view steadily rising credit scores as evidence that you pose less of a risk as a borrower, so as scores increase over time, you gain access to a wider array of loans and credit cards, with potentially higher loan amounts and credit limits and lower interest rates and fees.
  • Avoid penalties from your lender. Loan contracts and cardholder agreements typically spell out fees or penalties you must pay if you miss a payment due date by as little as one day. On a first offense you might be able to get a lender to rescind the penalty (it can't hurt to ask), but those fees can really add up. And credit card penalties are added to your purchase balance, so they can cost you interest charges as well. It's far less costly to just make your payments on time.
  • Worry less. If you don't have a system for ensuring payments are made on time, you can spend a surprising amount of energy fretting about whether you've made this or that payment already this month, scrambling to transfer funds in the eleventh hour, and otherwise sweating over the state of your bills. We all experience anxiety over things we can't control, and taking charge of a manageable task like bill paying can make your life a little calmer and less stressful.

A healthy credit history can bring some peace of mind and will promote steady credit score improvement. Checking your credit score and report for free through Experian can help you see how improving your payment history can have a positive effect. As long as you pay your bills on time every month without fail, and attend to the other factors that contribute to credit scores, monitoring your credit scores will be a satisfying endeavor.

How Good Is Your Credit Score?

300 credit score301 credit score302 credit score303 credit score304 credit score305 credit score306 credit score307 credit score308 credit score309 credit score310 credit score311 credit score312 credit score313 credit score314 credit score315 credit score316 credit score317 credit score318 credit score319 credit score320 credit score321 credit score322 credit score323 credit score324 credit score325 credit score326 credit score327 credit score328 credit score329 credit score330 credit score331 credit score332 credit score333 credit score334 credit score335 credit score336 credit score337 credit score338 credit score339 credit score340 credit score341 credit score342 credit score343 credit score344 credit score345 credit score346 credit score347 credit score348 credit score349 credit score350 credit score351 credit score352 credit score353 credit score354 credit score355 credit score356 credit score357 credit score358 credit score359 credit score360 credit score361 credit score362 credit score363 credit score364 credit score365 credit score366 credit score367 credit score368 credit score369 credit score370 credit score371 credit score372 credit score373 credit score374 credit score375 credit score376 credit score377 credit score378 credit score379 credit score380 credit score381 credit score382 credit score383 credit score384 credit score385 credit score386 credit score387 credit score388 credit score389 credit score390 credit score391 credit score392 credit score393 credit score394 credit score395 credit score396 credit score397 credit score398 credit score399 credit score400 credit score401 credit score402 credit score403 credit score404 credit score405 credit score406 credit score407 credit score408 credit score409 credit score410 credit score411 credit score412 credit score413 credit score414 credit score415 credit score416 credit score417 credit score418 credit score419 credit score420 credit score421 credit score422 credit score423 credit score424 credit score425 credit score426 credit score427 credit score428 credit score429 credit score430 credit score431 credit score432 credit score433 credit score434 credit score435 credit score436 credit score437 credit score438 credit score439 credit score440 credit score441 credit score442 credit score443 credit score444 credit score445 credit score446 credit score447 credit score448 credit score449 credit score450 credit score451 credit score452 credit score453 credit score454 credit score455 credit score456 credit score457 credit score458 credit score459 credit score460 credit score461 credit score462 credit score463 credit score464 credit score465 credit score466 credit score467 credit score468 credit score469 credit score470 credit score471 credit score472 credit score473 credit score474 credit score475 credit score476 credit score477 credit score478 credit score479 credit score480 credit score481 credit score482 credit score483 credit score484 credit score485 credit score486 credit score487 credit score488 credit score489 credit score490 credit score491 credit score492 credit score493 credit score494 credit score495 credit score496 credit score497 credit score498 credit score499 credit score500 credit score501 credit score502 credit score503 credit score504 credit score505 credit score506 credit score507 credit score508 credit score509 credit score510 credit score511 credit score512 credit score513 credit score514 credit score515 credit score516 credit score517 credit score518 credit score519 credit score520 credit score521 credit score522 credit score523 credit score524 credit score525 credit score526 credit score527 credit score528 credit score529 credit score530 credit score531 credit score532 credit score533 credit score534 credit score535 credit score536 credit score537 credit score538 credit score539 credit score540 credit score541 credit score542 credit score543 credit score544 credit score545 credit score546 credit score547 credit score548 credit score549 credit score550 credit score551 credit score552 credit score553 credit score554 credit score555 credit score556 credit score557 credit score558 credit score559 credit score560 credit score561 credit score562 credit score563 credit score564 credit score565 credit score566 credit score567 credit score568 credit score569 credit score570 credit score571 credit score572 credit score573 credit score574 credit score575 credit score576 credit score577 credit score578 credit score579 credit score