What’s The Most Important Part of Your Credit Score?

There are five different categories that make up your credit score, and one of them makes up over one-third of your score all by itself.

Welcome to the Score Countdown, where we’re counting down the most important scores!

Score number 5? The score for Star Wars: A New Hope, which was labeled the number one greatest movie score on AFI’s list of greatest film scores. And how could it not be?

Score number 4? That would be 370, which was the combined score of the highest scoring NBA game in history on December 13, 1983, when the Pistons beat the Nuggets 186 to 184.

Coming in at score number three is 1,247,700, the current high score for the “Donkey Kong” arcade game, set by Robbie Lakeman on February 2018.

The second most important score is the “four score” of Gettysburg Address fame.

And coming in at number one, the most important score there is … your credit score! Yes, your credit score is very important if you’re looking to get a personal loan, an apartment, a car, or any number of other things. And it’s made up of different parts.

But let’s just ask the question you came to have answered: What’s the most important part of your credit score?

The most important part of your credit score is …

Of the five factors that make up your credit score, the most important one is payment history. We’re glad we could answer that question for you. Have a nice day! Keep warm!

Wait, how do you improve your payment history?

Don’t worry, we weren’t just going to leave you to fend for yourself. We spoke to the experts to find out how you can improve your payment history. The first piece of advice may seem obvious, but it’s also very important.

“Start making payments on time,” urged Leslie H. Tayne Esq. (@LeslieHTayneEsq), Founder and Head Attorney at Tayne Law Group (@taynelawgroup). “If your credit score is hurting because of your payment history, this likely means you haven’t been making your payments on time. In order to begin to remedy this, you need to start paying on time.”

“Paying as much as you possibly can by the due date will be the fastest way to improve your score, but even making the minimum payment on time will help. Do whatever you need to do to remember to make a payment.

“I write all of my due dates on my desk calendar in red pen so I don’t forget. Or perhaps set a calendar reminder in your phone or leave yourself notes where you’ll see them and remember. You can’t erase late payments from your history. The only way to repair it is to change your habits.”

“Be patient: One on-time payment won’t erase years of damage from late payments. Boosting your score will be a gradual process, particularly if it’s very low. Late payments appear on your credit report for seven years. You will need to establish a consistent pattern of paying on time to help counteract late payments. Late payments affect your credit more the more recent they are, so working to pay on time consistently will help lessen the damage.”

Request a (free) copy of your credit report.

“Aside from the obvious answer of pay your bills on time, there are a couple other things you can do to help your payment history on your credit score,” explained Joyce Blue (@EmpoweringYouLEC).

“The first thing is to get a copy of your credit report from all three credit bureaus and make sure the information reported is accurate. You’d be surprised to find out that it isn’t always right. Since this category of your score is 35 percent of how your credit score is calculated you want to make sure that the reports are correct.”

Here’s the good news: you can get one free copy of your credit report from all three credit bureaus once a year! To request a free copy of your credit report, visit www.AnnualCreditReport.com.

“Make sure to dispute anything on your report that is not correct,” Blue continued. “Payment history stays on your report of 7 years. If you have anything reported that is older than seven years you can request that it be removed as well. You can also request things to be removed that are not quite seven years old, and sometimes you will be successful in having those removed as well.”

Ask your landlord to report your rent.

“Are you great at paying your rent, but not all your other bills? You can go to your landlord and ask them to report your on-time payment history to the credit bureaus,” said Blue.

“Usually, the larger apartment complexes will be more apt to do this for you, but it never hurts to ask even with a landlord with a single rental. If you don’t ask, the answer will always be no.

“This will help show your on-time payment history and can be a boost to other things you might not have as good a track record paying.”

Use a credit card … carefully.

If you don’t really have a payment history to speak of, the best way to build one is through limited and responsible credit card use.

“Whether with a standard or secured card, just make one small purchase a month and pay it off in full,” advised Todd Christensen, education manager for Money Fit (@MoneyFitbyDRS).

“Best examples are Netflix and cell phone bills. They are small and typically the same every month. Do NOT carry the card with you into a consumer purchase situation (store).”

While payments you make on an installment loan can also help your credit score, this isn’t true for all types of personal loans. If you have lousy credit, be warned that most short-term bad credit loans like payday loans, cash advances, and title loans can’t help your score; they can only hurt it.

That’s because most lenders who offer no credit check loans don’t report payment information; they basically opt out of the credit check ecosystem altogether.

Of course, there are four other factors besides your payment history.

The other four factors.

Even though payment history is the most important part of your credit score, you don’t want to neglect the other four factors, which are, in descending order of importance: amounts owed or credit utilization, length of your credit history, credit mix, and new credit inquiries.

“Aside from your payment history, your credit utilization ratio is another major factor in your credit score,” Tayne told us. “This is the amount of money you owe versus your total credit line, and it includes all of your credit cards and loans.

“Keeping a low credit utilization ratio—under 30 percent is preferred, but you should aim for even less than 30 percent—can also help to offset a negative payment history. Working to get under or stay under that ratio, while also making payments on time, can help repair your credit.”

OK, now you have some solid advice to help you build up your credit score. Stay warm! And to learn more about credit scores, check out these other posts and articles from OppLoans:

Do you have a question about credit scores? Let us know! You can find us on Facebook and Twitter.

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Money relationship expert and self-empowerment coach, Joyce Blue is a certified Rapid Results coach. Joyce is passionate about empowering others to master their relationship with money, so all of their relationships thrive, they step into their power and fall in love with their lives. Contact Joyce at joyce@joyceblue.com or on Facebook and Instagram @EmpoweringYouLEC.
Author and Accredited Financial Counselor®, Todd R. Christensen, MIM, MA, is Education Manager at Money Fit by DRS, Inc. (@MoneyFitbyDRS), a nationwide nonprofit financial wellness and credit counseling agency. Todd develops educational programs and produces materials that teach personal financial skills and responsibilities to all ages. Having facilitated nearly two thousand workshops since 2004 on the fundamentals of effective money management, he based his first book, Everyday Money for Everyday People (2014), on the discussions, tips, stories and ideas shared by the tens of thousands of individuals and couples in attendance.
Leslie H. Tayne, Esq. (@LeslieHTayneEsq) has nearly 20 years’ experience in the practice area of consumer and business financial debt-related services. Leslie is the founder and head attorney at Tayne Law Group (@taynelawgroup), which specializes in debt relief.

The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.