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How does your payment history affect your credit score?

Your payment history is the single most important credit score factor


You payment history is the most important factor of your FICO score and accounts for 35% of your overall credit score. Paying your balance off every month not only helps improve your credit score, but indicates to lenders that you are financially sound.

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Paying back your credit card and loan balances on time is the most important factor in your credit score.

Your payment history comprises many complex components, but experts say that, ultimately, it boils down to never missing a payment.

The primary objective of a credit score is to illustrate to lenders just how likely you are to repay your debts. While many other types of credit scores are out there, FICO’s is by far the one lenders use most to make lending decisions. The higher your score, the more likely you are to qualify for a lower interest rate and a high credit limit. A high credit score can also help you qualify for the best insurance rates, car loans, home leases and mortgages.

What is payment history?

Your payment history is the single most important factor in your FICO score, accounting for 35%.

Payment history is made up of the following information:

  • Payment information on various types of accounts, including credit cards, retail accounts, installment loans and mortgages
  • Adverse public records, such as bankruptcies, judgments, suits and liens, as well as collection items and delinquencies. (Some liens and nearly all civil judgments are no longer included in consumers’ credit reports under new rules that took effect in July 2017.)
  • How long overdue any delinquent payments have become
  • The amount of money still owed on delinquent accounts or collection items
  • How much time has passed since any delinquencies, adverse public records or collection items
  • The number of past due items listed on a credit report
  • How many accounts are being paid as agreed

How does payment history impact your credit score?

As the weightiest component of your credit score, payment history can have a huge impact on your credit score. Pay your bills in full and on time and your score will see the benefits. On the other hand, start to miss payments and your score will rapidly go in the other direction.

“Missing any form of payment can have a negative impact on your credit score and can pose a potential risk to lenders – whether it be from a credit card or a loan,” said Heather Battison, former vice president at TransUnion. “That is why it is imperative to pay off debts on time and in full each month.”

How long blemishes remain on your credit report can also vary: Negative items generally stay on a credit report for seven years, but can remain for up to 10 years in the case of certain bankruptcies.

Meanwhile, you can expect on-time payments to appear on your credit report. Payment information from other businesses, such as utility companies, renters and landlords, isn’t necessarily listed on credit reports, or included in your FICO score, unless you sign up for Experian Boost.

“FICO’s research has shown that a person’s payment track record tends to be the strongest predictor of the likelihood that the individual will pay all debts as agreed in the future,” said Barry Paperno, a credit scoring expert who has worked for FICO and Experian.

In other words, FICO has found that if you’ve handled credit well in the past, you’re more likely to do it in the future, too.

What about payment history for authorized users?

If you’re an authorized user on someone’s credit card, things can get tricky. While the payment history for a shared account can impact an authorized user’s FICO score, one of the bureaus (Experian) only includes positive information on the authorized user’s credit report, while the other two bureaus include both positive and negative data.

Authorized users are not legally responsible for any balances on the owner’s account. They can even remove part of their histories if things go wrong with the authorized account – all they have to do is ask to be removed from the card account, and that card’s history will vanish from their payment history.

How to improve your payment history

Building a strong payment history is not only about what you do right but also about what you do wrong. If you have a less than stellar payment history, you can do a few things to get back on track.

Pay off your credit card balance in full each month

While this may seem obvious, the best way to improve your payment history and your overall credit score is to pay off your balance each month. A consistent payment history is a great way to improve your credit score and make sure you are spending within your means.

Try Experian Boost

Experian Boost is a free tool offered by Experian that incorporates everyday on-time payments into your credit report. In addition to your credit card statement, your cell phone bill, streaming services and general utilities can be factored into your credit score to improve your payment history.

Check your credit score regularly

You may have been told that checking your credit report can hurt your overall credit score, but this is just a pervasive myth in the credit industry. Checking your credit report regularly has no impact on your credit score and can help you stay on top of your finances, so late payments don’t catch you by surprise.

Consider a balance transfer card

If you are stuck in a cycle of high-interest credit card debt that negatively impacts your payment history, a balance transfer card could help. Balance transfer cards allow you to transfer a balance that is subject to a high-interest rate to a new card that offers an introductory 0% APR. A lack of compounding interest could be a good way to start making a dent in your debt while improving your payment history.

Bottom line

Your payment history may be just one component of your overall credit score, but getting off track can drastically affect your credit and financial health. The key to keeping a good payment history is always paying off your balance when possible.

If you’ve already found yourself in a situation where you have a less than satisfactory payment history, you still have options. Start trying to pay your balance off in full each month, and if that isn’t an option, consider a balance transfer card to help reduce your debt.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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