Does autopay help my credit scores?
Find out if autopay improves your credit scores to learn if this payment option is right for you.
Keeping track of your monthly bills might not be fun, but it’s important. Your payment history is an important part of your credit scores because it shows lenders how well you might handle payments in the future. And missing one or more bill payments that are reported to credit bureaus could take a toll on your credit scores.
Setting up automatic payments can help you pay bills on time. It means you don’t have to remember to pay them each month. But while automatic payments are a simple and easy way to give you added peace of mind, do they help boost your credit scores? Here’s what you need to know about automatic payments and your credit scores.
What are automatic payments?
When you set up automatic payments, you authorize a business to take payments directly from your bank account or charge your credit card. You can set up automatic payments with any business that offers this service. And you may be able to schedule the payments on dates that work best for you.
Automatic payments for credit cards
If your card issuer offers it, you can create automatic payments for your monthly credit card bills. Capital One cardholders have access to its AutoPay feature. You can choose a payment amount and set it to pay by your due date each month. And you can change or cancel it at any time.
Do automatic payments help my credit scores?
In a word, no—automatic payments don’t directly help your credit scores.
When it comes to payments that are reported to credit bureaus, as long as your payment arrives on time, automatic payments don’t affect your credit scores any more than if you’d dropped your payment in the nearest mailbox. That being said, auto payments can help you consistently pay your bills on time. And a history of making on-time payments can help your credit scores over time.
It may seem like a no-brainer, but make sure you set an auto payment to go through before the payment is due each month. If your payment isn’t received by the due date, you might be charged late fees and interest. And payments that are 30 days or more past due might be reported as late to the credit bureaus, which could negatively affect your credit scores.
Another obvious but important tip: Make sure you have enough money in your bank account to cover your automatic payments for your credit card account. If you don’t, the payment might not go through, and you could be hit with an overdraft fee. Even if your bank doesn’t charge overdraft fees, it’s still not a great way to manage your bills.
Automatic payments and your credit
Automatic payments won’t, by themselves, directly help your credit scores. But if they’re set up correctly to make required payments by their due dates, they will help you consistently make payments on time. And that will help keep your account—and, over time, your credit scores—in good standing.
Two key factors worth remembering: Set the payment for on or before the due date, and have enough funds in your bank account to cover the payment amounts. In the end, auto payments are a great way to help you create long-standing habits of paying bills on time and managing your debt well. And, over time, your credit scores will thank you for it.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.