BACK

Cavan Images/ Cavan/ Getty Images

Videos

Video: How payment history affects your credit score

Summary

Financial mistakes can haunt you and your FICO score

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

 

Whether it’s a bad relationship, a big lie or a gas station hot dog, past mistakes can come back to haunt you. And, unfortunately, that also goes for financial mistakes.

Your payment history is the biggest factor that goes into calculating your FICO score: the number used by credit card issuers and other lenders, as well as landlords, insurance companies and even employers to judge how creditworthy or trustworthy you are. No one likes being judged, but your payment history makes up 35 percent of your score, so you’ll want to pay attention. Here are a few factors that determine your history.

Remember that shopping spree you went on three years ago that you couldn’t pay off? Any late payments on that account, as well as your payment behavior with other credit cards, installment loans and mortgages make up your payment history. If you were delinquent on any of those payments by 30 days or more, that’s included in your history for at least seven years – 10 years if it ended in bankruptcy.

The good news is, your payment history includes how much time has passed since those delinquencies. It also includes accounts paid as agreed. So if your financial behavior improves, that will work in your favor.

What if you’re only late once, though? We all make mistakes. But how much will that mistake hurt your score? It depends. Your credit score is based on information provided by creditors. Once you’re more than 30 days late, your missed payment is likely to be reported to the credit bureaus. A missed payment can drop your score anywhere from 60 to 110 points, depending on how high your score already is and how many other delinquencies you have.

Your best bet? Make sure history tells a good story. Always make your payments on time and in full.

See related:  How late payments get reported to credit bureaus, Video: Credit card payment due dates explained,

What’s up next?

In Videos

Video: Building credit as a new U.S. resident

Here are five tips for building credit from scratch

Published: August 10, 2016

See more stories
Credit Card Rate Report Updated: October 16th, 2019
Business
15.18%
Airline
17.11%
Cash Back
17.25%
Reward
17.13%
Student
17.29%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.