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How Does Payment History Impact Your Credit Score?

Payment history is a record of how you’ve made payments to your accounts throughout your credit life. Payment history constitutes up to 35% of your credit score, therefore, it has an impact and important role in calculating your credit score.

Tracking your past bill payment performance is the best predictor of whether you’ll be able to pay off all future debts as agreed.  This is why the lender always looks at your credit history before approving your loan request.

What if I have a late payment history? : Improving Credit Score

A small number of late payments is not an instant “score-killer.”  Also, having no late payments on your credit report doesn’t guarantee that you’ll receive a “perfect credit score.” Your history of payments is just one aspect of the data that is used to calculate the FICO scores.

What are accounts used to calculate your payment history?

  • Credit cards (Visa, MasterCard, American Express, Discover, etc.)
  • Credit cards for retailers (credit from shops where you shop, similar to credit cards at department stores)
  • Installment loans (loans that require you to make regular payments, much like car loans)
  • Bank loans, credit union loans, and online lender loans
  • Mortgage loans
  • Public records and collection accounts

Things that can bring your payment history down :

  • Bankruptcies are recorded in your credit file for 7 to 10 years, based on the type of bankruptcy.
  • Lawsuits
  • Default on loans
  • Late payment on loans

How To Improve Your Payment History: Credit Score

Make sure you pay your bills in time

It’s simple and simpler to do. It’s the best method of getting your pay-off history back in order.

Create a budget

This will make sure you have the funds to make your payments in time. This may require some sacrifices, but it’s better to let go of some things today instead of sabotaging your credit for the rest of your life.

Stay current on missed payments

The more time a credit issue is, the less it’ll count in your score on credit. Also, the longer you can make your payments in time even when you’ve had payment issues, the greater chances of your FICO Scores being able to rise.

Contact creditors

Talk to your creditor and find out whether they can assist with any of your issues. They might take action like decreasing your interest rate so that you can pay your debts faster.

Get help

You could also talk to an expert in credit counseling who may be able to assist in establishing a proper budget for your finances and consolidating debts which could all help improve your credit rating.


Payment history is the most important score factor that can either increase or reduce your credit score. Therefore, it is crucial to pay attention to it and make sure that your bills are paid in time.


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