Definition
Payment history is a record of how you've paid your credit accounts over time, including whether payments were made on time, late, or missed entirely. It's the most important factor in credit scoring models, accounting for approximately 35% of your FICO score. Your payment history includes information about credit cards, retail accounts, installment loans, finance company accounts, and mortgages. It also incorporates public records and collection items such as bankruptcies, foreclosures, lawsuits, wage attachments, and collection accounts.
Frequently Asked Questions
How long do late payments stay on my payment history?
Late payments typically remain on your credit report for seven years from the date of the delinquency, even if you later bring the account current or close it. The impact on your credit score is most significant in the first two years, gradually diminishing over time if you maintain a positive payment history going forward.
How can I improve my payment history?
To improve your payment history: (1) Always pay at least the minimum payment by the due date; (2) Set up automatic payments or calendar reminders to avoid missing due dates; (3) Contact creditors immediately if you anticipate payment difficulties to discuss hardship options; (4) Consider asking creditors to remove occasional late payments via goodwill letters if you have an otherwise strong history; and (5) Be patient, as building a positive payment history takes time.
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