How to Improve Your Payment History on Your Credit Report

One of the most significant elements that make up a credit score is payment history. Your payment history documents whether you’ve paid your bills on time and outlines a detailed history of your bill payments for each of your reported accounts.

The Federal Trade Commission notes that late payments negatively affect your credit score, and according to CNBC, payment history makes up 35% of your score

If you’ve paid some of your bills late in the past, you can change your habits by paying bills on time and potentially increasing your credit score. Keep reading to learn how to improve payment history on credit reports.

Payment History Quick Facts 

What Financial Factors Make Up a Credit Score? 

A variety of financial factors go into determining your credit score. Experian notes that the following factors are considered: payment history, accounts owed, length of credit history, new credit and credit mix. 

Not all aspects have the same weight on your score. Each element accounts for a certain percentage of your total score. Here’s a look at the breakdown of your credit score: 

  • Payment history: 35%
  • Credit utilization: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10% 

Payment history is one of the most critical parts of your score. If you want to improve your credit score, you don’t overlook this area. Try your best to pay all of your bills on time each month. 

Where Can You View Your Payment History?

You can see your payment history on your credit report. Consumers are entitled to one free credit report every 12 months from each of the three credit reporting bureaus. Currently, because of the pandemic, you are entitled to one free credit report weekly for a limited time.

When looking at your report, you’ll see the factors that make up your credit. You’ll see which accounts list on-time payments, as well as accounts that have late payments or that have outstanding debt. 

It’s recommended that you look at your credit report at least once a year. You can access your credit report from to see where your credit stands and what changes you may need to make. 

How Much Can One Late Payment Hurt Your Credit Score? 

How badly a late payment hurts your score depends on your credit history and how late the bill payment is. According to data gathered by FICO, an individual can experience up to a 180-point drop in their FICO score depending on the severity of the late payment and their credit history. Someone with a good credit score and history who missed a payment by 30 days might experience around a 60-point drop in their credit score

How Soon Are Late Payments Reported?

You might be wondering how soon late payments are reported by creditors and then shown on a credit report. In most cases, it takes at least 30 days from the payment due date for late payments or nonpayments to be reported. Some creditors wait until payments are 60 days past due

That means if you pay a bill only one or two weeks after it’s due, it might not show up on your credit report as a late item. That doesn’t mean you should get in the habit of regularly paying your bills late, though. 

There are other negative consequences to paying your bills late. The company may charge late fees. When you pay your bills late, you might develop poor payment habits, which isn’t great for your financial situation.  

Do All Credit Bureaus Get Notified About a Late Payment?

There are three main credit bureaus—Experian, Equifax and TransUnion. When your bills are paid on time, paid late or not paid at all, lenders will notify one or more of the credit bureaus.

It’s important to know that not all lenders send this kind of information to all three credit bureaus. They might send it to one credit bureau, but not the other two. Because of this, your credit reports and credit scores may vary from one bureau to another. You might see a late payment on one report but not the other. That’s why it’s important to review your report from each bureau on a regular basis.

What if a Mistake Is Made?

If an account has been incorrectly reported as paid late, you can file a dispute to correct the mistake. When filing a dispute, be sure to include supporting evidence. The credit bureau will investigate the matter, and if your claims are correct, it must fix the error. 

How Can You Improve Your Payment History? 

You may wonder how to improve payment history on your credit reports. It’s possible to do so by learning from your past mistakes. Begin paying every single bill that you get on time. Over time, more of your accounts will be marked as paid on time—resulting in an improved credit report and, possibly, an improved credit score

Here are some tips to help you with this process:

  • Mark every bill and bill total on your calendar. When you see what bill is due and how much is owed, it’s hard to forget to make payments. 
  • Set up bill reminder emails. Many lenders offer to send bill reminder emails. You can get an email alert when your bill is coming up so you remember to pay on time.
  • Set up auto-pay. If you have the means to do so, setting up auto-pay can be beneficial. This way, your bills are automatically paid on a set date each month. Make sure that you have enough funds and regular income coming in if you do this. 
  • Schedule or pay nonregular bills right away. You may get some one-time bills that aren’t regular. When these types of statements come your way, it’s a smart idea to schedule them or pay them right away so that you don’t forget about them.

Want to Improve Your Payment History? Pay Your Bills on Time

It’s not a secret—you need to pay your bills on time. Following the above tips can help you remember to pay your bills regularly, which might help to increase your credit score. 

If you struggle with your payment history credit score situation, you might need a little guidance. Sign up for ExtraCredit and take a closer look at your credit history and your credit score.

You can also sign up for our free Credit Report Card. It provides a breakdown of the five major credit score factors and how you’re faring with each. That might help you figure out what changes you need to make to positively impact your payment history and credit score.