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Payment History

35% of your FICO score

Payment history is the most well known part of the FICO algorithm, it is a history of how well you repay debt.  Included are installment loans, which are loans with a fixed loan amount, monthly payment amount, and a term.  Some common installment loans are mortgages, car loans, student loans, and personal loans.  Revolving credit items also fall into this category.  Revolving accounts have an open end term, have a credit limit, and allow you carry a balance.  You may borrow money up to the credit limit and pay it off on a monthly basis.  The most common forms of revolving accounts are credit cards, lines of credit, and home equity lines of credit (HELOC).  Some utility companies such as Gas, Water, Electric, and Cable also report on credit reports.

Here is a list of some of the negative items which fall into this category;

  • Late Payments
  • Charge-offs
  • Collections
  • Accounts included in Bankruptcy
  • Foreclosures
  • Repossessions
  • Judgments
  • Tax Liens
  • Bankruptcy

The last 6 months of your payment history carries the most weight when calculating your FICO score, accounts within the last 24 months carry the second most weight.  Recent late payments, collections, and other derogatory items within the last six months will hurt your credit score more than older inactive accounts.  In fact, a collection account with a $0 balance active within the last six months can actually hurt your score more than a three year old collection which carries a balance.  This is why paying off collections can sometimes lower your credit score.  More on that later.


Payment History in order of importance

Last 6 months payment history

Last 24 months payment history

Last 7 years payment history




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