How Tracking Your Payments Can Help Improve Your Credit – Guest Post

How Tracking Your Payments Can Help Improve Your Credit – Guest Post

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How Tracking Your Payments Can Help Improve Your Credit

This article was contributed by our friends at Loans Canada, Canada’s loan search platform.

As a borrower, the health of your credit is important. In fact, a good credit score can make it easier to get approved for credit products, loans, and other financial services. Not to mention, it’s a great way to save money. One of the best ways to give your credit score a boost or make sure you’re on top of your credit health is to always make your payments on time.

If you’re having trouble making your payments on time, whether that’s because you’re a bit more forgetful than you’d like or because you’re struggling to keep up with your debt load. A great way to make sure you’re not falling behind is to track your payments. Keep reading for everything you need to know about tracking your payments and how Sprout can keep you accountable.

What Affects Your Credit Score?

When it comes to making sure your credit score is exactly where you want it to be (do you know what your credit score means? Click here to find out), it’s essential to understand the five factors that affect your credit score. This knowledge can not only help raise your credit score, but it can also teach you better financial habits so you’ll have a solid foundation to create the financial future you deserve.

Payment History (35%)

The more payments you make on time and in full, the further your credit score will rise. However, if you’re late, short, or miss a payment entirely, your score will drop, impacting your financial situation negatively. Therefore, it’s best to set yourself up with some kind of reminder, especially if you have multiple payments to deal with.

Current Debts (30%)

The second largest factor that affects your score is the amount of debt you currently owe. The larger your unpaid balances are, the more your score will decrease, so it’s important to pay down your debts whenever possible.

Account History (15%)

The older your credit accounts are, the better it is for your score. For instance, it’s typically healthier to make good payments using the same credit card for several years than it is to consistently cancel and apply for new ones.

Number of Inquiries (10%)

Whenever you apply for a credit product, your lender can check your credit report, which will add a hard inquiry to your credit history. Every time this happens, your score will drop by a few points and affect your report for about a year, so it’s better not to apply for new credit too frequently.

Types of Accounts (10%)

It’s also beneficial to have several types of credit accounts listed on your report, such as a credit card, a line of credit, and loan. While it’s not a good idea to take on more debts than you can handle, using a variety of credit products responsibly can help you build and improve your credit.

Why is Your Payment History So Important?

Simply put, your payment history shows lenders how easy (or difficult) it is for you to handle your debts, which is why it’s one of the first factors they’ll inspect when you apply for new credit (Learn how to check your payment history here). Not only will a positive history raise your credit score, but it also makes you more creditworthy, so you’ll be more likely to get approved for larger amounts of money and more affordable rates.

Of course, an unhealthy payment history will result in negative consequences. After all, any missed payments will appear on your credit report and affect your credit score for several years. This is why it’s essential to complete all your payments as assigned and avoid taking on too much new credit within a short period of time.

How Can Payment Tracking Improve Your Credit?

Although late, short, and missed payments can happen for plenty of reasons, some of the worst credit damage occurs when you have multiple payment dates and have trouble remembering them all.

That’s where the ability to track your payments can be extremely helpful. Sprout’s payment tracker can help you accomplish that goal by sending you a notification whenever a bill comes due. With these alerts, you’ll never miss a payment date or add a defaulted payment to your credit report again!

How to Fix Your Payment History

If you’re planning to use credit regularly, it’s important to build and (if necessary) fix your payment history however you can. This will give you the best shot at securing new credit and more affordable rates down the line.

If You Have No Payment History…

  • When building your history from the ground up, a good first step is to take out and responsibly use a credit card. This way, you can spend some time making complete payments and, in doing so, elevate your credit score slowly but surely.
  • Once you’ve gained some experience, try adding more variety to your payment history with a personal loan, line of credit, or even your monthly cell phone bill. Again, this will only work if all your payments are on time and in full amounts!

If You Have a Bad Payment History…

  • If you already have active credit accounts, but a poor credit history, the best thing you can do is to be patient and pay your bills as they’re scheduled. Patient and consistency are key when it comes to working toward a better credit score.
  • If you’ve done all that you can but are still having trouble keeping track of your payments, it’s time to consider taking your credit and financial health a step further. With Sprout, you’ll never miss a payment again because it tracks your payments and sends your smart reminders and notifications. You’ll even start to see an improvement in your credit score sooner than you think.


Your credit score is the backbone of your financial life and often dictates whether or not you’ll get approved for the credit products and services you need. Keeping on top of your payments is one of the best ways to start taking your credit health seriously. If this is a priority for you, Sprout, the newest Financial Wellness App to hit the market, is a great place to start.


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