How to Build Credit using Payment History Letters

Payment history letters are issued by companies or organizations with which you have a credit history. When you have a consistent financial obligation, credibility may be established and credit rating may improve. For example, if you borrow money via a peer to peer lending company that has not reported your credibility to a credit bureau, a letter illustrating your credibility can be requested directly from the peer lending facilitator. The company may otherwise be unable to release credit information due to privacy clauses in terms of service, or due to credit bureau reporting restrictions.

Payment history letters can be sent to lenders, employers, organizations and credit bureaus to help improve your credit rating with one or more of those parties. This would constitute a independent rating by the lender and not a credit bureau. For example, if you are applying for a home loan and the lender has already obtained a credit report from credit bureaus they may seek further evidence of your credit history. In such case, a payment history letter from a non-reporting service such as trash removal, or cable companies may be used.

Additional credit history letters or statements may be requested from county and state governments to validate you are up to date with traffic tickets, or taxes such as property tax on a vehicle or previous mortgage. Even a gym membership or club membership for which monthly or semi-annual payments are paid over a period of time represent a payment history. In such case,  a letter may be obtained to improve credit rating. What types of payment history letters are accepted can depend on the specific lender’s requirements.

Payment history letters can also be useful to improve your credit score and rating with a credit bureau rather than credibility with an individual lender. To do this the Payment Reporting Builds Credit, Inc. (PRBC) bureau may be a good first stop. This is a more pro-active type of credit bureau in the sense that consumers can directly influence credit  rating by what they report to the bureau. Payment history letters can also be used to dispute existing credit scores at one of the four additional credit bureaus including Innovis. The Federal Trade Commission (FTC) provides tips on disputing credit scores at its website.

An additional way to use payment history letters is via prepaid debit cards. According to prepaid debit cards can be used to improve credit via credit history letters or reports. For example, the Account Now Prepaid Visa Debit Card helps individuals with bad credit build a credit history by collecting payment history data from payments made via the Account Now Debit Card. This information is then sent to the Payment History Builds Credit bureau to generate a credit score.

Letters of Credit  also demonstrate credit history indirectly as financial institutions issue these letters to demonstrate creditworthiness and payment from a client. For example, if an individual or company seeks financing or inventory from a company, that financing may be supported by an Standby Letter of Credit or an Irrevocable Letter of Credit  that in effect secures payment for the lender. Although the financial institution may require a minimum amount of depository funds by the borrower, conditions for the letter may also include a credit history with that financial institution such as with a bank guarantee. The resulting purchase history made possible via the letter of credit may help improve credit further.


1. (Federal Trade Commission)
2. (Innovis)
3. (FTC: Credit Score)
4. (MicroBilt: PRBC)
5. (