How to stay on top then with your payment history? The most obvious one is to pay your bills consistently and on time. You can set up for autopay or set monthly reminders to not miss a due date because of busy schedule. Creditors may also adjust your due date if it would be better to suit your salary schedule.

Is there a way to remove late payments from the credit score? The answer is YES! If you and your creditor have a positive relationship, writing them a “goodwill letter” requesting to remove your late payment history might yield to positive result. You can also sign up to the lender’s auto pay facility and lender might consider to overlook the late payment (and won’t report it) since you are kind of giving them a guarantee of regular payment through auto pay.

Credit utilization

Credit utilization – also known as debt-to-limit – is the percentage of available credit that has been borrowed. It is calculated by dividing your balance on existing credit cards by your credit limits.

The main goal is to maintain low credit card balances and avoid hard credit inquiries. It doesn’t matter if you pay off your balances every month, in credit utilization, what’s more important is you don’t owe more than 15%–25% of your total available credit on any of your credit card at any point during your billing cycle. Although note that having $0 balance on your accounts will not guarantee a higher credit score. Lenders want to see if you are responsible and financially stable to pay back, but owing nothing means no history to check.

FICO, the biggest name in the country focused on credit scoring services, says people with the best credit scores tend to have a credit utilization ratio of less than 6%. Most of them have three credit cards carrying balances with less than $3,000 owed.

How to determine your credit card utilization ratio? First, add up all the balances on your cards. Second, add up all the credit limits on your cards. Finally, to get your credit utilization ratio, divide your total balances by your total credit limit.

Is there a way to improve credit utilization ratio to improve credit score? Opening another credit card might improve your credit utilization ratio. This strategy should be used in caution, though. A new credit card might in effect reduce the average age of your credit accounts and 15% of your credit score is based on your credit age. Another approach to improve credit utilization ratio is pay balances twice a month if you can afford it. Another option is to ask your credit card provider for a credit limit increase.

Length of credit history

With FICO, credit history or credit age affects 15% of the total credit score. With Vantage Score, credit age and types of credit are combined into a single factor that makes up to 30% of your credit score. Credit age is the length of time each account has been open and how long you have been using that credit. To establish a good credit history, it is said that you have to keep your accounts active for seven years.