How to improve your credit payment history?

A good credit history is crucial for maintaining a high credit score. You need to efficiently manage your payment history to improve your credit score.

The payment history can affect your future credit and loan prospects. A higher credit score helps you to secure a host of financial services from a new credit card to the best housing loan. With a healthy credit history, it is possible to avail several credit instruments and services at lower interest rates.

Here’s how you can improve your credit history which in turn could be useful in building a high credit score.

Regularly review your credit report

The first step to improving your credit payment history is to understand your credit report. It provides details of all of your credit activities, including how timely you’ve paid your bills. Keep on reviewing your credit report at regular intervals to address any discrepancies for removing errors in your credit history.

You access credit reports for free through online platforms like Moneycontrol. This service is provided in partnership with CRIF Highmark, ensuring you get a detailed overview of your credit status. Check for any errors or inaccuracies in your credit report. If you spot any, contact the relevant authorities to get those rectified, as errors can negatively impact your credit score history.

Pay your bills on time

Consistent and timely payment of bills could help in improving your credit payment history. It shows your reliability as a borrower and can positively impact your credit score.

• Set up reminders: Use reminders on your phone or calendar to alert you of upcoming payment due dates. You can also use third party apps to make payments as they send regular reminders of your due dates.


• Automate payments: Automating your payments ensures that bills are paid on time every month, reducing the risk of missed payments. Typically, you can choose the amount you want to repay via autopayments. For example, if you are not comfortable with paying off the entire bill amount using autopay, you can set up autopay only for minimum amount due.


• Prioritise repayments: Focus on paying off your credit card bills and loan EMIs before taking up any other expenses.

Reduce outstanding debt

Having a lot of debt can negatively impact your credit score history and make it more difficult to maintain a good payment history. Paying off and reducing debt contributes to better credit and financial stability.

• Make a budget: Credit cards may lead to overspending. To keep tabs on your expenses create a monthly budget and if possible a spending category-wise budget.


• Pay off high-interest debt: To save money and lower your total debt load, concentrate on paying off high-interest credit card bills and loans first.


• Negotiate with creditors: Negotiate with your creditors and also discuss options for lower interest rates or better payment terms.

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Avoid late payments

A good credit score may suffer significantly due to late payments. So, it’s very important to avoid missing any payments to maintain a positive credit history.

• Review statements periodically: Make sure you are aware of all due dates by periodically reviewing your credit account apps or statements.


• Make use of payment tools: To organise and plan payments, make use of the tools such as auto-pay or third party apps that send timely payment reminders.


• Communicate with creditors: Get in touch with your creditors to discuss potential relief alternatives if you anticipate financial difficulties.

Keep an eye on how you use credit

Your credit score may be impacted by credit utilisation, or the ratio of credit used to the permissible limit. It is better for your credit payment history if you have optimal credit usage.

• Keep utilisation low: To ensure a good credit score, keep your credit utilisation low. Ideally, you should not be using more than 30% of your approved credit limit at a given point of time.


• Raise credit limits: To enhance your credit utilisation ratio, if possible, try to get your credit limit increased.


• Pay balances early: Try to pay off your balances before your statement is generated to reduce the amount reported to bureaus.

ALSO READ: What Affects Your Credit Score & How To Build a Healthy Credit Score

Address negative marks on your credit report

If your credit report includes negative marks, such as missed payments or defaults, it’s important to address them as soon as possible.

• Gradually rebuild credit: Prioritise good credit usage habits to progressively make up for any bad times.


• Make a goodwill adjustment request: Should a one-time event cause you to miss a payment, you can request your creditor for a goodwill adjustment.


• Close or settle accounts: Negotiate settlements for any accounts that are in default to have them marked as ‘settled’ or ‘paid.’ However, any such solutions are solely at the discretion of lenders.

Use credit responsibly

Improving and maintaining a good credit score history involves not only fixing past issues but also adopting responsible credit habits.

• Apply for credit instruments wisely: Avoid applying for new credit cards or loans frequently, as multiple applications can negatively impact your credit history.


• Monitor your credit: Regularly check your credit report and score to stay on top of your credit health and catch any potential issues early.


• Educate yourself: Stay informed about credit management practices to continue maintaining a strong credit score history.

Improving your payment history requires dedication and strategic planning, but it is essential for achieving and maintaining a good credit score. By understanding your credit report, paying your bills on time, reducing debt and managing credit utilisation, you can improve your credit payment history. Moneycontrol’s free credit score and detailed credit report can be valuable tools in this process, helping you make informed decisions and track your progress.