That largest percentage of the credit score makeup of a consumer is from their payment history. Payment history counts for 35% of your total credit score. This means how you pay your bills counts for more than one-third of your total score.
By law creditors have to wait 30 days to report you late to the credit bureaus. After 30 days they will report you late and your credit scores will go down. If you pay your bills on time, your scores go up. If you are late your scores will drop, and sometimes the scores can drop significantly.
I have seen one late payment on a mortgage account lower a consumer’s mortgage score over 120 points. Late payments can have a massive impact on your credit score, which is why it’s so important that you never go more than 30 days late when paying your bills.
Insure you have open and active positive accounts that reflect a positive payment history. This will help your scores go up, as positive credit history is the best way to increase your scores. Plus by having lots of paid-as-agreed accounts you can better offset any late payments that might occur.
Keep in mind that the 35% of the score that has to do with payment history, is a weights-and-balance of good versus bad payment history. The more good payments your reports have the better your score will be.
So, what’s most important is that you have a lot of positive accounts on your credit that are paid as agreed, while you avoid paying any accounts late.
And remind yourself that if you are paying a bill close to 30 days late, then you should send your payment certified mail so you have confirmation of when the payment was sent. Creditors like to play games, and this evidence will help you in case the creditor reports a negative mark against them, even when you did mail your payment before the 30 days passed.
Remember, the biggest factor affecting your credit scores is payment history. So insure you know how important paying you bills are in relation to your credit health.
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