Payment History Factor

Your payment history isn’t the only ingredient that makes up your FICO® Scores, but it is one of the most important.

There are 5 factors that make up your credit score:

  1. Payment History
  2. Amounts Owed
  3. Length of Credit History
  4. New Credit
  5. Credit Mix

For right now, we’re going to focus on #1: Payment History. Of course, you can always check out myFICO for information about the other four factors used to determine your FICO® Score.

What is payment history?

According to, “Payment history is an indication for lenders and creditors whether an individual is a lending risk due to a history of late or missed payments”.

This evidence of repayment is the primary reason why payment history makes up 35% of your FICO® Scores and is a major factor in its calculation. Research shows that your track record of payment tends to be the strongest predictor of the likelihood that you’ll pay all debts as agreed to. And as you can imagine, a lender’s number one priority is your past record of paying back (or not) your loans.

What determines your payment history?

Your payment history consists of a number of things – some in the past and others in the present. 7 data components make up your payment history:

  • Payment information on credit cards, retail accounts, installment loans, mortgages and other types of accounts
  • How overdue delinquent payments are today or may have become in the past
  • The amount of money still owed on delinquent accounts or collection items
  • The number of past due items on a credit report
  • Adverse public records (i.e., bankruptcies, liens, collection items, etc.)
  • The amount of time that’s passed since delinquencies, adverse public records or collection items were introduced
  • The number of accounts that are being paid as agreed

How would you rate yourself on these 7 factors? Would you say any of them might be negatively affecting your payment history and therefore your FICO® Scores? If the answer is “yes”, read on…

Tips to Enhance Your Payment History.

Since going back in time is not a reality (yet), improving your payment history has to take place right now. The tips below might sound a little obvious, but reading them might help give you that push to make that first move. Payment history can be improved upon, but there’s only one person who can do that… You. Here’s how:

  • Pay bills on time. Sounds simple, and easier said than done, but it’s the best way to start getting your payment history back on track. Set up a budget to ensure you have the money necessary to pay your bills on time. It might mean some sacrifices, but better to give up a few things now than to ruin your credit for a lifetime.
  • Get/stay current on missed payments. The older a credit problem, the less it counts toward your credit score. So the longer you pay your bills on time, even after having late payments, the more potential for your FICO® Scores to increase.
  • Contact creditors/get help. Contact your creditors to see if they can help you in any way, like lowering your interest rate so you can pay off your debt faster. You can also meet with a credit counseling service who might be able to assist you with properly budgeting your money and consolidating your debts – all potentially help you improve your credit history.

We all know that sooner or later our past catches up with us. When it comes to our payment history, it sometimes catches up a little sooner than we’d like. That’s why it’s so important to have a budget that helps ensure our bills are paid on time, every time.

Check out the myFICO forums to see how others have worked to improve their payment history and all the other factors that go into our credit scores.

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Rob is a writer… of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one’s journey toward financial well-being. His goal is simple: The more people he can help, the better.

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