Your credit history is an indicator of how likely you are to repay your debts, so it makes sense that your payment history is the most important factor in your credit score. Exactly how payment history is reported and how it affects you, however, can vary based on the type of loan and the credit scoring model that’s being used.

• What is Payment History
• What is Credit Score
• How to Fix Payment History on Credit Report
• How to Improve Credit Score
• How Much Does Payment History Affect Credit Score
• What Hurts Your Credit Score The Most
• How Long Does it Take For Payment History to Improve
• What Percentage of Your Credit Score is Payment History
• Can You Have a 700 Credit Score With Late Payment
• Does Credit Score go up Everytime You Make Payment
• Is 650 a Good Credit Score
• How to Raise Your Credit Score Overnight
• What is an Excellent Credit Score
• Can You Buy a House With a 573 Credit Score
• Why Credit Score Drops After Paying Off Debt
• Should You Pay Off Your Credit Card in Full
• What is a Goodwill Adjustment
• How to Wipe Your Credit Clean

What is Payment History

Your payment history is a record of your past debt payments. With the most commonly used scoring model, the FICO Score, it’s the most influential factor in how your credit is assessed, making up 35% of your credit score. As a result, it’s important to focus on whether you’re working to build your credit history or maintain a good score.

In contrast, the VantageScore only states that your payment history is moderately influential, favoring credit mix and experience and total credit usage, balance and available credit. Because the FICO Score is more widely used by lenders, however, it’s best to use its weighting as a guide.

While your payment history is part of your overall credit history, they’re not the same. Your credit history incorporates more than just your payment history. It also considers other aspects of your credit journey, including how much you owe, the length and mix of your credit history, and recent credit applications.

What is Credit Score

A credit score is a number ranging from 300-850 that depicts a consumer’s creditworthiness. The higher the credit score, the more attractive the borrower.

A credit score is based on credit history: number of open accounts, total levels of debt, and repayment history. Lenders use credit scores to evaluate the probability that an individual will repay loans in a timely manner.

How to Fix Payment History on Credit Report

There are two basic reasons why a late payment might be shown on your credit reports:

1. You’re not at fault: The late payment is a mistake, and was reported in error.
2. You’re at fault: You actually did make a late payment.

In the first case, it may be possible to remove the late payment from your credit reports by filing a dispute. The credit bureaus don’t want inaccurate information on their reports, so if your claim can be verified, they’ll take steps to fix the problem.

In the second case, you may be able to have the late payment removed from your credit reports. This process basically consists of asking nicely, explaining your situation, and promising to be more responsible in the future. There’s absolutely no guarantee that this will work, and you’ll have better success if you have a positive payment history other than this blemish.

If You’re Not At Fault: Dispute The Late Payment

Use this method if there’s an incorrect late payment on your credit reports, which didn’t actually occur.

You can also use this method if you actually made a late payment but there’s some inaccurate information associated with it. In this case you probably shouldn’t expect to have the late payment record completely removed. Instead, your creditor will probably just correct the error but the delinquency will stay on your report.

Disputing items on your credit report is free. You may need to dispute the late payment with several companies in all. Here’s the basic procedure:

1. Identify the problem: Verify which credit reports the late payment appears on.
2. Contact the creditor: Contact the creditor to see if they’ll correct the mistake and notify the credit bureaus.
3. Contact the credit bureaus: If necessary, contact the credit bureaus to dispute the late payment.
4. Confirm the error has been corrected: Check all three of your credit reports to make sure the inaccurate late payment has been deleted.

Remember to be patient. This process may be solved successfully at step 2, or it could take longer. You shouldn’t have much of a problem with the major credit card issuers if they clearly made a mistake, even if you have to spend more time on the phone than you’d like. But, it’s possible that other credit card companies might be more difficult to work with, like issuers of subprime cards.

If You’re At Fault

If you really did make a late payment, there’s still a chance you can have it removed from your credit reports. This might be a slim chance, but it’s worth trying because late payments can potentially have such a significant impact on your credit.

For these methods, you’ll just be contacting the lender or creditor, rather than the credit bureaus. You’re basically just pleading your case and asking it to forgive the late payment — it’s under no obligation to actually do so. If the lender decides to report the account as current instead of delinquent as a result, this is typically known as a “goodwill adjustment.”

This might work if you have an otherwise excellent payment history with that lender, and have been a responsible customer except for this mistake. If there was a technical error that prevented you from paying on time, like an issue with the payment system, that could work in your favor. Or, if there was some major life event that prevented you from paying by the due date, your card issuer may be sympathetic to that as well.

If you haven’t been a very good customer, however, and have a history of late payments and other negative marks, you probably won’t have much success with a goodwill adjustment. But it might still worth a shot, depending on your situation. It won’t cost you anything to try but some time.

There are only two steps in this process:

1. Ask nicely: Make a goodwill phone call/write a goodwill letter
2. Negotiate: If asking nicely fails, you can try to negotiate with the lender

How to Improve Credit Score

To improve your scores, start by checking your credit scores online. When you get your scores, you will also get information about which factors are affecting your scores the most. These risk factors will help you understand the changes you can make to start improving your scores. You will need to allow some time for any changes you make to be reported by your creditors and subsequently reflected in your credit scores.

Of course, certain credit score factors are typically more important than others. Payment history and credit utilization ratios are among the most important in many critical credit scoring models, and together they can represent up to 70% of a credit score, which means they’re hugely influential.

Focusing on the following actions will help your credit scores improve over time. A credit score reflects credit payment patterns over time, with more emphasis on recent information.

1. Pay Your Bills on Time

When lenders review your credit report and request a credit score for you, they’re very interested in how reliably you pay your bills. That’s because past payment performance is usually considered a good predictor of future performance.

You can positively influence this credit scoring factor by paying all your bills on time as agreed every month. Paying late or settling an account for less than what you originally agreed to pay can negatively affect credit scores.

You’ll want to pay all bills on time—not just credit card bills or any loans you may have, such as auto loans or student loans, but also your rent, utilities, phone bill and so on. It’s also a good idea to use resources and tools available to you, such as automatic payments or calendar reminders, to help ensure you pay on time every month.

If you’re behind on any payments, bring them current as soon as possible. Although late or missed payments appear as negative information on your credit report for seven years, their impact on your credit score declines over time: Older late payments have less effect than more recent ones.

2. Get Credit for Making Utility and Cell Phone Payments on Time

If you’ve been making utility and cell phone payments on time, there is a way for you to improve your credit score by factoring in those payments through a new, free product called Experian Boost.

Through this new opt-in product, consumers can allow Experian to connect to their bank accounts to identify utility and telecom payment history. After a consumer verifies the data and confirms they want it added to their Experian credit file, an updated FICO^® Score will be delivered in real time.

3. Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit

The credit utilization ratio is another important number in credit score calculations. It is calculated by adding all your credit card balances at any given time and dividing that amount by your total credit limit.

For example, if you typically charge about $2,000 each month and your total credit limit across all your cards is $10,000, your utilization ratio is 20%.

To figure out your average credit utilization ratio, look at all your credit card statements from the last 12 months. Add the statement balances for each month across all your cards and divide by 12. That’s how much credit you use on average each month.

Lenders typically like to see low ratios of 30% or less, and people with the best credit scores often have very low credit utilization ratios. A low credit utilization ratio tells lenders you haven’t maxed out your credit cards and likely know how to manage credit well. You can positively influence your credit utilization ratio by:

• Paying off debt and keeping credit card balances low.
• Becoming an authorized user on another person’s account (as long as they use credit responsibly).

4. Apply for and Open New Credit Accounts Only as Needed

Don’t open accounts just to have a better credit mix—it probably won’t improve your credit score.

Unnecessary credit can harm your credit score in multiple ways, from creating too many hard inquiries on your credit report to tempting you to overspend and accumulate debt.

5. Don’t Close Unused Credit Cards

Keeping unused credit cards open—as long as they’re not costing you money in annual fees—is a smart strategy, because closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit scores.

6. Don’t Apply for Too Much New Credit, Resulting in Multiple Inquiries

Opening a new credit card can increase your overall credit limit, but the act of applying for credit creates a hard inquiry on your credit report. Too many hard inquiries can negatively impact your credit score, though this effect will fade over time. Hard inquiries remain on your credit report for two years.

7. Dispute Any Inaccuracies on Your Credit Reports

You should check your credit reports at all three credit reporting bureaus (TransUnion, Equifax, and Experian) for any inaccuracies. Incorrect information on your credit reports could drag your scores down. Verify that the accounts listed on your reports are correct. If you see errors, dispute the information and get it corrected right away. Monitoring your credit on a regular basis can help you spot inaccuracies before they can do damage.

How Much Does Payment History Affect Credit Score

Late payments can go on your credit reports and affect your score only if you are more than 30 days past due. You may have to pay your lender or card issuer a late fee before then, but it can’t legally be reported to the credit bureaus.

Once you go past the 30-day mark, the late payment will show up in your payment history. The longer you go without paying, the worse it is for your score.

Conversely, if you pay all your bills on time, you will have a good payment history and your score will benefit. There are other factors that go into your score, too, such as how much of your available credit you use and the types of credit you have. But because payment history is the most influential credit factor, it’s very hard to have a good score without a good payment history.

What Hurts Your Credit Score The Most

The following common actions can hurt your credit score:

• Missing payments. Payment history is one of the most important aspects of your FICO^® Score, and even one 30-day late payment or missed payment can have a negative impact.
• Using too much available credit. High credit utilization can be a red flag to creditors that you’re too dependent on credit. Credit utilization is calculated by dividing the total amount of revolving credit you are currently using by the total of all your credit limits. Lenders like to see credit utilization under 30%—under 10% is even better. This ratio accounts for 30% of your FICO^® Score.
• Applying for a lot of credit in a short time. Each time a lender requests your credit reports for a lending decision, a hard inquiry is recorded in your credit file. These inquiries stay in your file for two years and can cause your score to go down slightly for a period of time. Lenders look at the number of hard inquiries to gauge how much new credit you are requesting. Too many inquiries in a short period of time can signal that you are in a dire financial situation or you are being denied new credit.
• Defaulting on accounts. The types of negative account information that can show up on your credit report include foreclosure, bankruptcy, repossession, charge-offs, settled accounts. Each of these can severely hurt your credit for years, even up to a decade.

How Long Does it Take For Payment History to Improve

Unfortunately, there’s no way to predict how soon your credit score will go up or by how much. We do know that it will take at least the amount of time it takes the business to update your credit report. Some businesses send credit report updates daily, others monthly. It can take up to several weeks for a change to appear on your credit report.

Once your credit report is updated with positive information, there’s no guarantee your credit score will go up right away or that it will increase enough to make a difference with an application. Your credit score could remain the same—or you could even see your credit score decrease—depending on the significance of the change and the other information on your credit report.

The only thing you can do is watch your credit score to see how it changes and continue making the right credit moves.

What Percentage of Your Credit Score is Payment History

Your payment history comprises 35 percent of the total credit score and the most important factor affecting credit score calculations. According to FICO, past long-term behavior is used to forecast future long-term behavior.

FICO keeps an eye on both revolving loans – such as credit cards – and installment loans, such as mortgages or student loans.

“FICO scores consider the frequency, recency and severity of reported missed payments,” said Tommy Lee, principal scientist at FICO. “Generally speaking, FICO scores do not consider missing a loan payment as more negative than missing a credit card payment.”

One of the best ways for borrowers to improve their credit score as a whole is by making consistent, timely payments. Previously, you had to rely on lenders and landlords to report this information to the credit bureaus. But with the 2019 launch of Experian Boost, you can take more control of your credit score by self-reporting good behavior.One of the best ways for borrowers to improve their credit score as a whole is by making consistent timely payments.

Can You Have a 700 Credit Score With Late Payment

Even if you have a history of late payments and your credit score isn’t what you’d like, here’s some good news — you can still turn your credit around and get your score above 700. 

As you can see from the chart below, FICO scores range from 300 to 850 — anything above 670 is typically considered to be “good,” but aiming for a score of 700 or higher is a sound goal, with 700 being approximately the average score.

FICO credit score ranges
Description: Your FICO credit score is classified as one of five categories. Each category represents a numerical range within your credit score and is determined by several factors.

Credit Score Ranges	Credit Score Values
Exceptional Credit Score	800 & Above
Very Good Credit Score	740 – 799
Good Credit Score	670 – 739
Fair Credit Score	580 – 669
Poor Credit Score	580 & Below

Source: Fair Isaac Corporation (myFICO.com).

Does Credit Score go up Everytime You Make Payment

The biggest single influence on your credit scores is paying bills on time, and historically that’s meant credit bills—payments on loans, credit cards and other debts. But now credit scores can benefit from timely utility and service payments as well.

Types of Accounts That Can Impact Credit Scores

Credit scoring software programs, known as scoring models, perform complex statistical analysis on the data in your credit reports—the records showing your history of borrowing money and paying your bills. Scoring models generate a three-digit score, based on your predicted likelihood of paying your bills. Models may use different score ranges, but all typically assign higher scores to individuals seen as likelier to repay their loans and lower scores to those seen as riskier borrowers.

While no two models operate identically, the FICO^® Score, used in 90% of all U.S. lending decisions, says payment history—your pattern of paying bills on time—is the single most significant influence on your FICO^® Score, responsible for as much as 35% of the score. FICO rival VantageScore^® has similarly cited payment history as the most influential factor affecting its scores.

Traditionally, credit reports have recorded payments on two types of debt: installment loans and revolving credit accounts.

• With an installment loan, you borrow a lump sum of money and pay it back in a series of regular payments over a set number of months. Each payment, or installment, is typically the same amount. Student loans, car loans, and mortgages are all examples of installment loans.
• Revolving loans, such as credit card accounts and some kinds of home equity loans, allow you to borrow against a specified borrowing limit and make repayments of varying amounts, as long as you meet a required minimum payment each month.

Is 650 a Good Credit Score

A FICO^® Score of 650 places you within a population of consumers whose credit may be seen as Fair. Your 650 FICO^® Score is lower than the average U.S. credit score.

Statistically speaking, 28% of consumers with credit scores in the Fair range are likely to become seriously delinquent in the future.

Some lenders dislike those odds and choose not to work with individuals whose FICO^® Scores fall within this range. Lenders focused on “subprime” borrowers, on the other hand, may seek out consumers with scores in the Fair range, but they typically charge high fees and steep interest rates. Consumers with FICO^® Scores in the good range (670-739) or higher are generally offered significantly better borrowing terms.

How to Raise Your Credit Score Overnight

You can raise your credit score 100 points overnight if you’re a victim of identity theft. If that doesn’t apply to you, a reality check is in order. Gaining a 100 points overnight is unrealistic. You can expect this increase in 24 months by settling debts and paying bills on time.

How to boost your credit score overnight:

1. Dispute all negatives on your credit report
2. Dispute all excess hard inquiries on your credit report
3. Pay down your revolving balances (0 is best, 30% is decent)
4. Pay your bills on time
5. Have family add you to their cards as an authorized user

Get Your Credit Score Improved Professionally

In some cases, we recommend speaking with a Credit Repair professional to analyze your credit report. It’s so much less stress, hassle, and time to let professionals identify the reasons for your score drop.

If you’re looking for a reputable company to increase your credit score, we recommend Credit Glory. Call them on (855) 938-3044 or setup a consultation with them. They also happen to have incredible customer service.

Credit Glory is a credit repair company that helps everyday Americans remove inaccurate, incomplete, unverifiable, unauthorized, or fraudulent negative items from their credit report. Their primary goal is empowering consumers with the opportunity and knowledge to reach their financial dreams in 2020 and beyond.

What is an Excellent Credit Score

Credit score ranges vary based on the credit scoring model used (FICO versus VantageScore) and the credit bureau (Experian, Equifax and TransUnion) that pulls the score. Below, you can check which credit score range you fall into, using estimates from Experian.

FICO Score

• Very poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

VantageScore

• Very poor: 300 to 499
• Poor: 500 to 600
• Fair: 601 to 660
• Good: 661 to 780
• Excellent: 781 to 850

What is The Most Important Credit Score

While it may surprise some, each consumer has multiple credit scores. There are several reasons why. First, most consumers have credit information at each of the three major credit bureaus–TransUnion, Equifax, and Experian.

While the credit data should generally be the same from one credit bureau to the next, there are often minor differences. These differences can result in three different credit scores, even if the score is generated by the same credit scoring model.

Second, there are multiple credit scoring models. As the CFPB’s orders show, for example, there are FICO scores and educational credit scores. Within each of these, there are even more variations.

For example, the CFPB’s orders state that FICO alone has offered more than 60 different scoring models since 2011. They have industry-specific models, as well as regular updates to existing FICO score models.

Given the multitude of scoring models, how do we determine which score a specific lender will use? According to Fair Isaac, 90% of “top” U.S. lenders use FICO scores. While that helps narrow the field, remember that Fair Isaac has introduced more than 60 FICO scores since 2011.

It turns out that the most widely used FICO score is the FICO Score 8, according to Fair Isaac. That’s true even though FICO Score 9 has been released. Fair Isaac goes on to provide the following advice:

• Financing a new car: FICO® Auto Scores, the industry specific scores used in the majority of auto financing-related credit evaluations.
• Getting a new credit card: FICO® Bankcard Scores or FICO® Score 8, the score versions used by many credit card issuers.
• Getting a mortgage: Base FICO® Score versions previous to FICO® Score 8, as these are the scores used in the majority of mortgage-related credit evaluations.

Can You Buy a House With a 573 Credit Score

Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 573 FICO^® Score is significantly below the average credit score.

Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit. Credit card applicants with scores in this range may be required to pay extra fees or to put down deposits on their cards. Utility companies may also require them to place security deposits on equipment or service contracts.

Why Credit Score Drops After Paying Off Debt

A big influence on your credit score is credit utilization — the percentage of your credit limit that you are currently using. That scoring factor is one reason your credit score could drop a little after you pay off debt. Having low credit utilization (30% or less and the lower the better) is good; having no credit utilization may be harmful to your score.

Some of the other factors that affect your credit score also could come into play. Paying off an installment loan, like a car loan or student loan, can help your finances but might ding your score. That’s because it typically results in fewer accounts. (That’s not a reason not to do it! Don’t stretch out a loan and pay more in interest just to save some credit score points.)

Age of your credit accounts, whether you’ve recently applied for credit and what kinds of credit you have also can affect your score. Here’s a breakdown of the factors that affect your credit scores in order of importance:

Should You Pay Off Your Credit Card in Full

Paying your credit card balance in full each month can help your credit scores. There is a common myth that carrying a balance on your credit card from month to month is good for your credit scores. That simply is not true.

Ideally, you should charge only what you can afford to pay off every month. Leaving a balance will not help your credit scores—it will just cost you money in the form of interest.

Carrying a high balance on your credit cards has a negative impact on scores because it increases your credit utilization ratio.

Your credit utilization ratio, or balance-to-limit ratio, shows how much of your available credit you’re using and is the second most important factor in your credit scores. To determine your utilization ratio, divide your total credit card balances by your total available credit.

Always try to stay under 30% utilization overall and on individual accounts; credit scores decrease much more rapidly when you exceed that percentage. Even if your overall utilization rate is low, having a high utilization on just one of your cards can have an impact. For top credit scores, keep your utilization in the single digits.

What is a Goodwill Adjustment

A goodwill letter is a request to a bank, lender or other creditor to remove a missed payment or other mistake from your credit report – an action known as a goodwill adjustment. As the name implies, the creditor is under no obligation to comply with or even consider your request. You’re totally at the mercy of your card issuer.

Goodwill letters are probably not an option if your credit file is messy and you’re looking for a credit score boost. But if you’re a responsible borrower who once missed a payment due to a medical or financial emergency or an honest mistake, a goodwill letter may succeed and help your score quickly recover from the damage.

Following are a few tips that can help increase your chances of getting a goodwill adjustment.

1. Be polite.
Never use a negative tone when writing a goodwill letter. Remember – the issuer or lender is under no obligation to erase a misstep from your credit report, no matter what circumstances led to it.

2. Don’t write a novel.
When explaining why you missed a payment, include any relevant facts. For instance, if your home was damaged in a flood, explain why you weren’t able to find a way to make your payment (i.e. there was a mass power outage and thus no way to access your online account, or you were too busy evacuating your home to pay your bill).

However, including too many details or over-explaining your situation can be counter-productive. Mike Sullivan, a personal finance consultant in Phoenix, recommends being direct and concise.

“I don’t think any customer service agent wants to spend hours reading a long story, so I would get to the point,” Sullivan said.

3. Include supporting evidence.
Conroy’s case illustrates the importance of providing proof to support your case. It could be as simple as a note from a collection agency that your debt was paid in full. Or if you failed to pay because you were seriously injured in an auto accident, you could provide copies of the police report and your hospital bill.

“Anything that can back up your claim and give some evidence that it was beyond your control is definitely going to help you,” said Nitzsche.

4. Make sure it gets to the right person.
Sullivan recommends sending your goodwill letter to a customer service agent at your bank, rather than the billing or finance departments. You could even deliver a copy of your letter to the manager of your bank’s local branch.

“When you’re sending the letter, it’s important that it gets read by somebody who can do something about it,” Sullivan said.

5. Follow up.
Chances are your goodwill letter won’t get an immediate response. If you don’t hear anything after about 30 days, follow up with a phone call or an email.

“I think [following up] is required in most instances unless your situation is so simple that they’re going to act on it,” Sullivan said. “There’s a good chance it is going to sit in a pile, so follow-up is important.

What Debt You Should Pay Off First to Raise Your Credit Score

There’s a good reason to pay off your highest interest debt first—it’s the debt that’s charging you the most interest! Credit cards with higher-than-average APRs can be especially hard to pay off, and anyone with a student loan or mortgage knows the frustration of making monthly payments that only go towards the interest, not the principal.

If you want to get rid of that high-interest debt as quickly as possible, start focusing your debt repayment efforts on your highest interest debt first. Keep making the minimum monthly payments on all of your credit cards and loans, but put every extra penny you can towards the card or loan with the highest interest rate.

While focusing on your highest interest debt first is a smart move, it isn’t necessarily the best option for everyone. If you’re making monthly payments on many different debts, for example, you might not have a lot of extra money to put towards your highest interest debt. In that case, it might be smarter for you to pay off your small debts as quickly as possible—which brings us to our next debt repayment strategy.

While some people choose to tackle their debt based on interest rate, other people take a different tactic: paying off their smallest debt first and working their way up to their largest debt. This debt repayment method is called the debt snowball, popularized by financial guru Dave Ramsey, because it starts small and grows over time.

The snowball method works because paying off a debt in full incentivizes you to keep working towards your goal—and as you pay off your smaller debts one by one, you’ll have more money to put towards your larger debts.

Yes, you might end up paying more in interest than you would have paid if you tackled your highest interest debt first, but the psychological benefits of getting those smaller debts paid off as quickly as possible can be very rewarding.

To get started with your debt snowball, list all of your current debts—and their current balances—from low to high. Continue to make the minimum monthly payment on all of your debts while putting as much extra money as possible towards your smallest debt.

Once that debt is paid off, put your extra money towards your next-smallest debt, and so on. The bigger you build your debt snowball, the closer you’ll get to debt freedom.

How to choose which debt to pay off first

If you want help choosing which debt to pay off first, a debt paydown calculator can help you create an optimized debt repayment plan. Simply enter all of your outstanding debts, the interest rates and the minimum monthly payments, as well as the amount of additional money you can afford to put towards debt repayment every month.

The calculator will run the numbers for you and provide you with a customized debt repayment strategy that tells you exactly how much money to pay on each debt every month, as well as how long it will take until you’re debt-free.

It will also tell you where to put any extra debt repayment money—so if you end up with a little extra cash at the end of the month, you’ll know which debt to put it towards.

Does Paying For Netflix Build Credit

You could build credit using your monthly subscription, without lifting a finger.

Using a credit card, or a secured credit card if you have no credit or bad credit, you can set up two monthly automatic payments that help you build credit while you sleep!

Each month as you make payments, your card issuer reports them to the major credit bureaus. This information then shows up on your credit report, and, if it’s positive news, could improve your credit.

Turn on two automatic payments

Step 1: Automatically pay with your credit card

To build credit watching Netflix, set up two automatic payments. Netflix and other subscriptions already require an automatic monthly charge for most accounts, which means using your debit card, bank account or credit card to pay.

To build credit with this system, make that charge on your credit card.

Step 2: Automatically pay your credit card from your bank account

Next, set up automatic payments for your credit card using your credit card website or your bank’s bill pay. In either case, the charge will be paid on time so you don’t have to pay any interest.

Just make sure your bank account always has the money to pay for the automatic charge to avoid overdrafts and related fees. Also, be aware of any cost increases from your subscription service so you don’t accidentally pay less than the amount due on your card’s autopay.

Remember, to avoid interest charges on a credit card, you have to pay off the balance in full each month.

Can You Pay to Clear Credit History

While it may seem like a good idea to pay someone to fix your credit reports, there is nothing a credit repair company can do for you that you can’t do yourself for free.

Do Credit Repair Companies Fix Your Credit?

The words “fix” and “repair” suggest your credit reports are somehow wrong or otherwise contain inaccurate information. This isn’t usually true and isn’t really how credit repair companies operate. Instead of helping consumers correct possibly inaccurate credit report entries, they attempt to have any negative information removed—whether the negative information is correct isn’t relevant to their efforts.

Credit repair companies cannot fix your credit. They don’t have a secret backchannel to the three credit bureaus (Experian, TransUnion and Equifax) that allows them to get information removed.

Further, the credit bureaus don’t delete credit information simply because you’ve hired a credit repair company. There’s simply nothing a credit repair company can do for you that’s any more effective than what you can do on your own.

How to Get an 800 Credit Score

1. Pay on Time

You don’t have to be a perfectionist to become a member of the 800 Club, but it does help.

Lending Tree, one of the prominent online lenders, did a study on consumers with 800-plus credit scores in 2019 and found mostly predictable characteristics, perfection being the first one.

Member of the 800 Club pay on time 100% of the time. Not some of the time or most of the time, but 100% OF THE TIME! Doesn’t matter if you’re talking about Baby Boomers or GenXers or Millennials, if they’re in the 800 Club, they never miss a payment.

The rest of us do. In fact, studies indicate that the average consumer has six late payments on his/her credit report. Those are costly. Just one 30-day late payment can bust your score down by as much as 100 points.

2. Limit Credit Use

If you have a credit card, surely you have heard that it’s best not to spend more than 30% of the credit limit on your card, or $300 on a $1,000 credit limit.

Unfortunately, that’s not good enough to get in the 800 Club.

Not surprisingly, members of the 800 Club have $71,000 in credit available every month. Shockingly, they spend only $3,685 with all that credit available. That is barely 5%!

For those of us with a card that has a $5,000 credit limit, 5% would mean spending under $250. That barely covers the cost of a weekly visit to the grocery store, let alone paying the bill for trips to a clothing store, restaurant, gas station or movie theater.

So, OK, 5% is probably unrealistic. So too is 10% and maybe even 15%.

But if you could drop your credit utilization down to 20% of your limit, that would be a giant step in the right direction.

“We also recommend keeping your balances low,” Griffin said. “Pay attention to the risk factors that come with your credit scores. Risk factors describe what you need to focus on to improve your credit scores.”

3. Mix and Match Methods of Borrowing

The algorithms that calculate credit scores love diversity, meaning they smile when they see you paying on a mortgage, car loan, student loan and credit card. What that says to them is that you can multi-task when bill paying time rolls around each month.

Members of the 800 Club, naturally, take it a step further. They average nine open accounts, which does wonders for not just the methods of borrowing, but also helps the credit utilization category immensely.

In most cases, the extra accounts are credit cards and here is how that helps.

As demonstrated above, if you rely on just one credit card to pay for all your expenses, your credit utilization likely is going to 50%-75% or higher. The credit score algorithms don’t care that you pay that off every month. They want the credit utilization under 30%.

So add three more cards to your wallet, each with $5,000 limits on them and suddenly your credit utilization is up to $20,000. If you spend the same amount with cards that month, your utilization drops dramatically, probably under 20%.

Not all of us are comfortable carrying that much credit in our pocket so be careful with this one.

How to Wipe Your Credit Clean

You can pay your creditors to delete charged-off credit cards, delinquent accounts, unpaid bills and any other negative entry from your credit rating. If you have spare cash, you can repair your credit instantly without going through the laborious process of waiting for negative entries to drop off of your credit report and using secured credit cards to build your credit score back up slowly.

Contact the creditor by mail or over the phone and request a “pay for delete” on the entry. If the amount owed is under $500, you can increase your chances of success by offering the full amount in return for a deletion. If the amount is larger, start by offering 10 percent; move up from there if you’re denied. Make sure that you request that the deletion occur within 10 to 30 days of the company receiving your payment.

Now you must wait for a reply from the creditor. The amount of time you can expect to wait varies, but typically 30 days is enough time to receive a reply. Don’t send any payment until you receive the agreement in writing stating that this negative item will be removed from your credit report once you pay.

After you receive this agreement, in writing, send payment promptly as agreed. You can use a check or even a money order if you don’t want your creditors finding out where you keep your bank accounts.

Monitor your credit report to ensure that the creditor follows through with your agreement. In most cases, it will follow through promptly, but it usually takes 30 days or more for your credit report to update. You now can further improve your credit score by paying bills and making loan payments on time.

A credit report clean of negative entries will improve your chances of being approved for affordable loans and credit cards, but a good credit history is necessary for building your score over the long term.

Summary

Payment history is the biggest score factor, so it’s important to pay close attention to it and make sure your bills are paid on time.