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Figuring out how to improve your credit score in anticipation of a major purchase like a home or car is a smart move. The better your credit score, the lower your cost to borrow money to make that purchase.

While credit scoring companies weigh a variety of factors in evaluating your credit history, your credit payment record is the most important component on the list. The surest way to boost your credit score is to consistently pay your bills on time.

Bill payment history accounts for 35 percent of a FICO score, according to MyFico, the consumer website of the most widely used U.S. credit scoring company. FICO scores typically range from 300 to 850 points. An excellent rating, earning the lowest rates on loans, is 760 or higher. Even one missed payment to a creditor can slash a decent credit score by more than 100 points, as this article notes.

Payment History Exam

In reviewing your payment history, credit scorers look at accounts from major card issuers like Visa, Mastercard, American Express and Discover; retail store accounts; installment loans; finance company accounts; and mortgage loans.

Just as with your overall credit score, the grade you receive for your bill-paying record depends on several things. For instance, if you've had any late payments, FICO wants to know how late they were. A 30-day delinquency won't count as much against you as being late three months or more. Other considerations include the total number of late payments you've had, how much you owed your creditors at the time and how long ago the last delay occurred.

The more recent the late or missed payment, the bigger the mark against your credit score. Credit reporting agencies automatically delete late payments from their reports after seven years.

Ready access to your FICO score is a useful tool. Holders of a KeyBank consumer credit card enjoy that access as a benefit of online and mobile banking.

Avoiding a Bad Score

One way to avoid having your credit score dinged for late payments is to create and stick to a budget that prioritizes credit payments above discretionary spending like eating out or adding to your wardrobe. It also might help to put all your payment due dates in your calendar – whether digital or the old-fashioned paper kind. Set up automatic payment for your bills, which can help ensure you won't get your credit dinged by a little absentmindedness. You can use Bill Pay to schedule and keep track of payments.

If you're having trouble paying your bills, there are steps you can take to soften the blow to your credit score and buy some time to get your money management back on track. Most credit card issuers offer hardship programs that will cut customers a break – in the form of adjusted due dates, reduced interest rates or waived fees – when they lose a job, incur unexpected medical expenses or encounter other financial challenges. But you'll need to contact them early to request this help. Once you get three months or more behind, they may not be as flexible.

A certified credit counselor can offer free or low-cost guidance to help you work out a plan to get your delinquent bills paid as quickly as possible. This Federal Trade Commission guide has tips on finding a credit counselor.

Not paying your bills on time will put a serious dent in your credit score. The good news is that even if you have a few late bills in your past, you can earn points for good bill-paying behavior going forward.

This information and recommendations contained herein are compiled from sources deemed reliable, but are not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or are offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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