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 you can raise 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 curb late fees. Splitting your bills into bimonthly payments also helps you avoid late or missed payments, and it can save you money, too.

Learn how to raise your credit score by splitting your monthly payments in two and paying off debt bimonthly. This trick can help you better manage your finances while showing creditors you’re a reliable borrower. Here’s how to improve your credit score and avoid late payments and fees.

How To Raise Your Credit Score by Paying Bills Bimonthly

This trick to boosting your credit score isn’t about doubling down on monthly bills — it’s about dividing payments in half 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. Assign two days each month to pay bills. To make this method easy, you can choose to pay bills each payday. If you’re consistently paid on the first and the 15th of each month, for example, opt to pay bills on those days. Choosing to pay bills on your paydays will make it easier for you to remember to make payments.
  3. Tally up 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 will your bimonthly payments. If your credit card bill, for example, was higher or lower than in the previous month, this will be reflected in how much you pay.
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15/3 Credit Card Payment Trick — Another Trick To Raise Your Credit Score

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

  1. Refer to your credit card statement for your payment due date.
  2. Then, count back 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 due date.

This method theoretically works by causing the system to count two payments per month. Although it’s not guaranteed,  those extra payments may result in a nice boost to your credit score. It’s worth a shot!

With a better credit score, you’ll be eligible for better — or even the best — interest rates with creditors.

Find Out: How It’s Possible to Have a Perfect Payment History and Bad Credit

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Why Multiple Monthly Payments Boost Your Credit Score

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

  1. Bimonthly payments can reduce credit utilization. Your debt-to-income ratio should be less than 36 percent, according to LendingTree. The less debt you maintain, the more lenders trust that you will be able to repay your debts. Making bimonthly payments reduces your DTI throughout your billing cycle if the lender applies the payments twice per month — check with the lender because some mortgage loan servicers, for example, only apply your payments once per month unless you’re on a bimonthly payment plan. Your lower DTI increases your available credit and your credit score.
  2. You’ll pay down debt faster. You’ll be paying debt down faster if you pay your loans bimonthly. With a typical payment plan, you make 12 full payments each year on your mortgage, auto or credit card debt. With bimonthly payments, you’ll make 13 full payments each year — that’s one extra payment each year. By paying off your debt just a little faster, you can save money on interest by paying down your principal.
  3. Bimonthly payments build better financial discipline. By adopting a bimonthly payment plan, you might be less likely to miss or be late on a payment. Your bills are on your mind each payday. With timely payments as your new status quo, you can watch your credit score climb.
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Also See: The Best Ways To Pay Off Every Kind of Debt

Raising Your Credit Score With Additional Payments

Don’t forget you can make additional payments on your loans. If you have an extra $100 or $200 each month or come upon a bonus or other windfall, put that money toward your payments.

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

Before accelerating or altering your payments, always check your auto or mortgage lender’s policy on penalty fees associated with paying off your loan early. It’s also best to turn off or cancel any automated bill payments you might have with banks or other lenders. You want to put your payments on manual transmission, leaving you in full control of your finances and boosting your credit score.

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Last updated: Oct. 15, 2021 

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About the Author

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