Payment history is the most significant factor in determining credit scores, accounting for 35% to 40% of the total.
Late payments can significantly damage credit scores, and the later the payment, the greater the damage.
Consistently making your payments on time for long periods is the best way to improve credit scores.
Paying bills on time can lead to lower monthly payments when taking out a loan, making monthly payments affordable.
While traditional ways to build credit include credit cards and loans, certain monthly bills can also affect credit scores.
Bills that can help build credit include rent, utilities, and medical expenses, only if they are reported to credit bureaus.
However, paying these non-credit bills usually won't increase credit scores unless you are reported for not paying them.
It is still a good practice to pay all bills on time so you don't increase your debt or end up paying high interest charges.
Paying bills on time is essential for maintaining a good credit score and ensuring you have a steady payment history.