Payment History
Approximately 35% of your score is based on your payment history.
The first thing any lender will want to know is whether you have paid past credit accounts on time. This is one of the most important factors in determining your credit score. However, late payments are not an automatic "score-killer." An overall good credit picture can outweigh one or two instances of late credit card payments. By the same token, having no late payments in your credit report doesn't mean you will get a "perfect score." On average 60-65% of all credit reports show no late payments at all.
Determining Factors of Your Payment History
The types of your current credit accounts and/or loans are considered when determining your payment history score. The following information is part of your credit history
- Major credit cards (Visa, MasterCard, American Express and Discover)
- Retail accounts (credit from stores where you do business, such as department store credit cards)
- Installment loans (loans where you make regular payments, such as car loans)
- Finance company accounts
- Mortgage loans
- Public record and collection items - reports of events such as:
- Bankruptcies
- Judgments
- Suits
- Liens
- Wage attachments
- Collection items
Accounts showing no late payments will increase your credit score.
If you have late payments, public record or collection items, certain factors will be examined when determining how much these will affect your credit score. These factors include:
- How late was each payment
- How much was owed
- How recently each late payment occurred
- How many late payments are there
Generally, a 30-day late payment is not as risky as a 90-day late payment, but current and frequent delinquencies count too. A 30-day late payment made just a month ago will count more than a 90-day late payment from five years ago.
Note: Closing an account on which you had previously missed a payment does not make the late payment disappear from your credit report.
