Credit score

This easy trick will improve your credit score and avoid late payments

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Paying bills on time is one of the easiest ways to boost your credit score. Your credit payment history accounts for up to 35% of your FICO score, according to myFICO. Keeping track of due dates is one way to reduce late fees. Splitting your bills into semi-monthly payments also helps you avoid late or missed payments, and it can also save you money.

Learn how to boost your credit score by dividing your monthly payments in half and paying off your debts every two months. This tip can help you better manage your finances while showing creditors that you are a reliable borrower. Here’s how to improve your credit score and avoid late payments and fees.

How to Boost Your Credit Score by Paying Your Bills Every Two Months

This trick to boosting your credit score isn’t about doubling your monthly bills — it’s about halving payments and paying twice as often. To get started, follow these three steps:

  1. Itemize your bills. Make a list of your recurring bills and their due dates.
  2. Allocate two days per month to pay bills. To make this method easy, you can choose to pay the bills every payday. If you regularly get paid on the 1st and 15th of each month, for example, choose to pay your bills on those days. Choosing to pay your bills on paydays will make it easier for you to remember to make payments.
  3. Calculate your monthly bills and divide them by two. If you pay $2,000 each month on bills, you’ll want to pay $1,000 in the first half of the month and $1,000 in the second half. Because the amount you owe on bills fluctuates, so do your semi-monthly payments. If your credit card bill, for example, was higher or lower than last month, this will be reflected in the amount you pay.

3/15 Credit Card Payment Trick – Another Trick to Boost Your Credit Score

Besides your bills and loan payments, splitting your credit card payments in half has the potential to increase your score in what’s called the 15/3 credit card payment hack. Here’s how to use it:

  1. Refer to your credit card statement for the due date of your payment.
  2. Then count 15 calendar days from that due date and pay half of your balance on that earlier date.
  3. Pay the remaining balance three days before your statement is due.

This method theoretically works by forcing the system to count two payments per month. Although it’s not guaranteed, these extra payments can give your credit score a big boost. Is it worth it!

With a better credit rating, you’ll qualify for better—even better—interest rates from creditors.

Discover: how it is possible to have a perfect payment history and bad credit

Why Multiple Monthly Payments Increase Your Credit Score

Splitting your monthly payment schedule into two installments is a great way to fix bad credit and boost your FICO score. Here are three ways semi-monthly payments can boost your credit score:

  1. Semi-monthly payments can reduce credit use. Your debt-to-income ratio should be below 36%, according to LendingTree. The less debt you maintain, the more lenders believe you will be able to repay your debts. Making semi-monthly payments lowers your DTI throughout your billing cycle if the lender applies payments twice a month – check with the lender as some mortgage managers, for example, only apply your payments once a month month, unless you are on a bi-monthly payment plan. Your lower DTI increases your available credit and your credit score.
  2. You will pay off your debts faster. You will pay off your debts faster if you repay your loans every two months. With a typical payment plan, you make 12 full payments each year on your mortgage, car, or credit card debt. With semi-monthly payments, you’ll make 13 full payments each year, or one additional payment each year. By paying down your debt a little faster, you can save on interest by paying down your principal.
  3. Bi-monthly payments reinforce financial discipline. By adopting a semi-monthly payment plan, you may be less likely to miss or be late on a payment. Your bills are on your mind every payday. With timely payments as the new status quo, you may see your credit score soar.

See also: The best ways to pay off all types of debt

Boost your credit score with extra payments

Remember that you can make additional payments on your loans. If you have an extra $100 or $200 each month or you come across a bonus or other windfall, use that money for your payouts.

Don’t get into the habit of making minimum payments. Make extra payments on your debts when your monthly expenses are lower. Rework your budget so that you can allocate a little more money to loans each month. You can also round payments; even small increases in payments will help you pay off your debts faster, thereby increasing your credit score by making you look like a reliable borrower. Order a free credit report to check your progress.

Before accelerating or changing your payments, always check your car or mortgage lender’s policy on penalty charges associated with prepaying your loan. It’s also best to disable or cancel any automated bill payments you may have with banks or other lenders. You want to put your payments on manual transmission, which puts you in full control of your finances and improves your credit score.

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Last update: October 15, 2021

About the Author

Ashley Eneriz is a California-based freelance writer who specializes in writing about frugal living, budgeting, and making money.