How Your Payment History Affects Your Credit Score

By: Christopher Wright

This is the foundation of obtaining a great score. If you're going to have bad credit, its best for it to be past bad credit. We can work on that. The one thing you have to do is make sure of is that your current debt and bills are being paid on time. You can't forget ANY bills, even the $15-$20 bills. I've seen people who pay their mortgage and car notes religiously. But when it comes to their miscellaneous debt, they put it off or forget. They rationalize that if the bill is only $15 it doesn't affect them as much as their mortgage. Not entirely a true statement.

Yes the mortgage may weigh more when considering a person's credit mix, but guess what? A 30 day missed payment is just that, a 30 day missed payment. So, its vital that you pay all debt on time, small and large.

OK, we've got your present debt in check. What can you do about past bad credit? Plenty! This discussion makes the assumption that you've pulled all three of your scores and reports. Look at the reports. First and foremost, check to be sure that the accounts listed are even yours. You'd be surprised to know that some accounts appear on your file that aren't even yours.

Are there any negative accounts that have been paid and are 7yrs old or more? These would be the second group to attack/dispute. Here's a tip. Even accounts 7yrs old that HAVE NOT been paid could come off through a dispute. How? Most companies only keep records for 18-24 months, which is why that time span is so important. An account that old may not be able to be verified, therefore must come off the report. Take notice that just because the account no longer appears on your file, doesn't mean that the debt isn't still owed. It just means your score will benefit from it coming off.

Now, we're not going to lie and say the debt isn't ours. That would be fraud. What you can do is write saying you're not sure about the debt amount listed or/and the late payments associated with the negative accounts. If they can't be verified...they should come off!

Another way to make your payment history better is to do the opposite of what we've just discussed. Instead of trying to take information off your file, simply add (good) accounts to your credit file.

Maybe you have a family member or close associate who can help you out with this strategy. What you want is for them to add you to one of their good paying accounts. It can be a credit card, store card, or whatever. As long as the account is in good standing and reports to all three major credit agencies. What this does is instantly add a good payment history to your file, thereby increasing your credit score.

One other thing to be aware of when using this technique is the liability factor. If possible, be added to the account as an 'authorized user' and not a joint user. An authorized user has the right to access the account but will not be held liable for delinquent payments. A joint user will not be so fortunate. If the account doesn't ask for the secondary user's social security number, then they may not report the account to the additional user's credit file.

Persistence is the key to making this strategy work.

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