credit score : Your loan repayment history What’s your track record for repaying creditors?
One of the most important factors in a credit score is your payment history.
It affects roughly 35 percent of your score.
The first thing any lender wants to know is whether you’ve paid past credit accounts on time.
Late payments aren’t an automatic “score-killer.”
An overall good credit picture can outweigh one or two instances of, say, late credit card payments.
On the other hand, having no late payments in your credit report doesn’t mean you automatically get a great score.
Some 60 to 65 percent of credit reports show no late payments at all.
Your payment history is just one piece of information used in calculating your credit score.
In the area of payments, your score takes the following into account :
Payment information on many types of accounts :
These types of accounts include credit cards such as Visa, MasterCard, American Express, PayPal Credit, and Discover, credit cards from stores
Or online merchants where you do business, installment loans (loans such as a mortgage on which you make regular payments), and finance company accounts.
Public record and collection items :
These items include reports of events such as bankruptcies, foreclosures, suits, wage attachments, liens, and judgments.
They’re considered quite serious, although older items and items with small amounts count less than more recent items or those with larger amounts.
Bankruptcies stay on your credit report for seven to ten years, depending on the type.
Details on late or missed payments (delinquencies) and public record and collection items :
The FICO score considers how late such payments were, how much you owed, how recently they occurred, and how many you have.
As a rule, a 60-day late payment isn’t as damaging as a 90-day late payment.
A 60-day late payment made just a month ago, however, penalizes you more than a 90-day late payment from five years ago.
How many accounts show no late payments (credit score) :
A good track record on most of your credit accounts increases your credit score.
So how do you improve your FICO score? Consider the possibilities:
Pay your bills on time.
Reprobate installments and accumulations can have a noteworthy negative effect on your score.
If you’ve missed payments, get current and stay current.
The more you pay your bills on schedule, the better your score.
Paying off or closing an account doesn’t remove it from your credit report.
The score still thinks about this data, since it mirrors your past credit design.
But closing accounts that you never use can help because the number of lines of credit and the total dollar amount of available credit are factors in the credit scoring algorithms.
If you’re having trouble making ends meet, get help.
This step doesn’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score gets better over time.