GradReady Practice Test

Paying bills on time is the most reliable habit for building good credit because your payment history carries the most weight in credit scores. Lenders want to see that you consistently repay what you borrow, and on-time payments become a positive record that boosts your score over time. Late payments are stark signals of risk and can be reported to credit bureaus for up to seven years, causing lasting damage. By making payments on or before the due date, you establish a track record of reliability that credit models reward. To put it into practice, set up automatic payments or reminders so you never miss a due date, and aim to pay at least the minimum on time—ideally paying in full when you can to avoid interest. The other behaviors are less reliable because they introduce potential negative signals: applying for credit frequently adds hard inquiries that can lower your score; carrying a high balance increases credit utilization, which can hurt your score; closing old accounts can shorten your credit history and reduce total available credit, potentially lowering your score.