Can On-Time Payments Help My Credit Score?

Published on Aug 19, 2014 01:43 pm

Your credit scores are a complex interaction of many different variables. Payment history is often an important factor in calculating credit score. While certain actions may help you help your scores, none of them exists as a singular cause.

Credit Score Composition

Creditors use your credit score to help estimate the amount of risk you can carry as a borrower. While past actions are never a guarantee of future behavior, a credit score is meant to represent the likelihood that you will either fail or succeed to meet a future credit obligation. Many variables may go into calculating a credit score. Your credit score might be calculated in part based on some or all of the following factors: your payment history; the amount of debt you have; the types of accounts you have; the number of times you apply for new credit; the age of your accounts; and whether or not you have a bankruptcy or judgment recorded against you.

Payment History

When it comes to credit scores, payment history is usually a very important element used to calculate your score. Making a single late payment may be enough to negatively impact your score, and a history of filing bankruptcy and not paying back your debt can be devastating to your credit overall.

Consistently making on-time payments is one of the cornerstones of a good credit score. If you’ve missed a payment in the past, making on-time payments can usually position you to build on your good credit. The effect of making on-time payments can be enhanced by time passing since your last missed payment. Thankfully, negative items have a smaller effect the more time passes, so if you’ve already made steps to improve your payment behaviors, that information will be reflected, too..

Minimum Payments

If you make all your payments on time but pay only the minimum amount due, the effect on your credit might not be as great as you might hope. While you may perform well in terms of your payment history, you won’t be reducing your debt as quickly over time. Debt balance also tends to be accounted for as an important factor in credit scoring. Furthermore, minimum payments won’t help much in the category of credit utilization, which is a measure of the amount of available credit you’re using at any given point.

Credit Monitoring

There is no cut-and-dry formula for you to compute your own credit scores. Different factors may have different effects for different people, and it’s hard to quantify the effect that the passage of time will have on your scores. However, monitoring your credit on a regular basis can help you see firsthand the effects of your credit behavior on your scores over time.

About the Author

John Csiszar began writing in 1989 and his work appears in various online publications, including The Huffington Post. Csiszar earned a B.A. in English from UCLA and served 18 years as an investment adviser and certified financial planner.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from, Inc., an Experian company.   © 2014, Inc.  All rights reserved.

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