How Your Payment History Affects Your Credit
Your history of making payments on time or not probably makes up for about 35 to 40% of you final score. This is because this is the most telling information about whether or not you can keep your payment promises or not.
Lenders want to know if you pay on time and how long it has been since you have made a late payment. Surprisingly, six out of ten Americans don’t have a single late payment their credit reports according to Fair Isaac. That makes not being in debt more the norm by a slight margin. Perhaps it is time for you to join the ranks of those responsible citizens who are not in any debt!
When it comes to negative comments like late payments on a credit report the overall FICO score is created by three factors:
• How recently you made the credit offense – The more time that has passed since you made the late payment, the less it will impact your credit score
• How frequently you pay late– A person who has made a dozen late payments is considered to be a greater risk than someone who has made just one or two late payments and will have a lower credit score
• How many days payments are overdue – A payment that is 30 days late is not considered to be as serious as a payment that is five months late. The biggest black marks on a credit records are those payments that are never made, as is the case with bankruptcy.