Pay Your Bills on Time

September 8th, 2011, by

Q: I was wondering how long after I pay off everything on my credit report will it take for my credit score to go from 580 to a 700?

A: So many people ask me this question. And, I’m sorry to say there isn’t a definite answer. So much goes into what makes up your credit score that it’s not possible to give you a checklist of things to do to guarantee your score will go from a 580 to a 700, or even how long it will take for your score to rise.

So, for now, concentrate on the things we know improves your score. For example, the number one way to push up your score is to pay your bills on time. I know it’s simple, but the scoring systems put a lot of weight on whether consumers pay their bills as agreed and on time.

In the FICO system, your payment history contributes 35% to your score calculation. Payment history has the greatest effect on improving your score. Delinquent payments—even if only a few days late—and collections can have a major negative impact on your FICO score.

And, just so you know, even paying off old delinquent debts doesn’t immediately boost your scores. Such negative information stays on your credit reports for 7 years. However, with each passing year, the negative information has less impact on your score.

The other thing that has a great impact is how much debt you owe, which contributes 30% to the calculation. As you are planning, paying off everything will help increase your score.

So, pay your bills on time and get rid of your debt, and you will see your scores go up over time.

Last modified: September 8, 2011 at 4:20 pm