Living with credit, Protecting yourself

Not paying late is the best way to keep your good credit

John Egan

Not long ago, I stopped by the office at my apartment complex. While I was there, one of the employees delicately informed me that my rent was overdue.

The due date is the first day of each month, but they’ll let it slide until the third day. Day Four is when it’s considered late. I was informed about my overdue payment on Day Four.

That news sent me into a mini-panic.

How could I have forgotten to pay my rent? I’m diligent about paying it on time!

Almost immediately, I hopped on my laptop computer, which I retrieved from the backpack in my car, and paid the rent online. I was relieved that I wasn’t going to be stuck with a late fee.

My obsession with on-time payments

In the years since going through some rough patches of consistently paying bills after the due date or simply skipping payments, I’ve become almost obsessed with paying bills, including my credit card bills, on or before the due date

And I would advise everybody to share my fanaticism about paying bills by the due date.

For one thing, paying bills on time gives you a sense of accomplishment. Yes, I can handle money like a grown-up!

Getting credit for responsibility

But more importantly, paying bills on time helps you build a solid payment history and contributes to a higher credit score.

FICO, the dominant player in credit scoring, says payment history makes up 35 percent of your FICO score. That’s the biggest factor among all of the credit-scoring factors.

FICO considers these kinds of accounts in assessing your credit history:

  • Credit cards like Visa, Mastercard, American Express and Discover.
  • Retail credit cards from stores like Macy’s, Target and Walmart.
  • Installment loans that involve regularly scheduled payments, such as car loans.
  • Home mortgages.
  • Short-term loans from finance companies.

‘Score-killer’ versus ‘perfect score’

“A few late payments are not an automatic ‘score-killer.’ An overall good credit history can outweigh one or two instances of late credit card payments,” FICO says.

“However, having no late payments in your credit report doesn’t mean you’ll get a ‘perfect score.’ Your payment history is just one piece of information used in calculating your FICO [scores].”

Nonetheless, the importance of paying bills on time shouldn’t be overlooked.

Making payments on or before the due date shows you’re responsible. Put another way, you’re less of a risk for a lender if you pay bills on time versus paying bills late or not paying them at all.

(In the eyes of the three credit-reporting bureaus, a payment isn’t treated as late until it’s at least 30 days overdue.)

Ask your card issuer to give you a break

If you’re in danger of making a late payment on a credit card, Howard Dvorkin, chairman of financial services company, advises calling the card issuer and seeking forgiveness.

“Sounds too good to be true, but many credit card companies will give you one free pass,” Dvorkin tells me. “Why? Because it’s a competitive market out there, and they want your business.

“So, they’ll cut you a break – once. But you need to call them as soon as you realize you messed up. They’re not so forgiving after the fact.”

In fact,’s 2018 survey found that 84 percent who asked got a late fee waived.

Reaching out to a card issuer before the fact can help you avoid a late fee, which can be as much as $38 if you’re a repeat offender. Even worse, a card issuer can charge interest on top of late fees.

So, paying bills on time not only boosts your payment history and potentially your credit score, but it also keeps you from being hit with late fees.

Breaking the late-payment habit

Now, what if you’re developing a pattern of making late credit card payments? Here are three tips.

  • Stop using your credit cards. Right away.
  • Focus on paying off the debt you’ve already got in a timely fashion.
  • Visit with a credit counselor at a nonprofit credit-counseling agency. The counselor can help you get your finances in order. To find a counselor in your area, visit the website of the National Foundation for Credit Counseling.

Easy ways you can prevent late payments

Setting up automatic payment reminders is among 5 ways to avoid (or deal with) late fees,” by my colleague Allie Johnson. Many card issuers and banks make it easy to set up these payment reminders.

Another way to avoid late payments is to have credit card payments automatically withdrawn by the due date each month. Again, you should be able to accomplish this online through your bank account or credit card account.

How I am putting late-payment nightmares to rest

I don’t use either of those tactics (although I should). What I do is religiously monitor my credit card accounts to ensure payments are made on time. And in many cases, I make more than one payment per month to further reduce my debt and to give me even more peace of mind.

Whichever tactics you use to head off late payments, I can tell you there’s one benefit that won’t show up on a credit report: You’ll likely sleep better at night.

And to most of us, a good night’s sleep is priceless.

See related: How quickly can my score recover from a late payment?How late payments get reported to credit bureaus, FICO’s 5 factors: The components of a credit score

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  • Bob

    Just set up auto pay