The Importance of Payment History

The first thing lenders look into a credit history is whether a customer has made credit payments on time. Credit payment history determines 35% of a FICO Score, and it is one of the most important factors, says myFICO.

Although having no late payments does not mean having a perfect score, it is one piece of information used in calculating FICO Scores.

What types of accounts are considered for credit payment history?

According to myFICO, the following account types are considered for credit history:

  • Credit cards
  • Retail accounts (credit from stores, like department store credit cards)
  • Installment loans
  • Finance company accounts
  • Mortgage loans

Other details on late or missed payments that FICO Score considers include:

  • How late the payment was
  • How much was owed
  • How recently they occurred
  • How many there are

Public record and collection items also play a role when taken into consideration for a FICO Score. myFICO explains that the negative factors involved include bankruptcies, lawsuits, and wage attachments.

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