How Does Payment History Affect Your Credit Score?

Payment history is your track record of paying your credit accounts. It's the most important factor in your score.
Amrita Jayakumar
By Amrita Jayakumar 
Edited by Kathy Hinson

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Your payment history is a record of your payment behavior on all credit accounts, such as credit cards and loans. It is the single biggest factor that influences your credit score.

Payment history gives lenders a snapshot of how you paid your bills — did you pay on time, did you miss any payments, were you sent to collections? If you often miss payments, for example, your score suffers and you are deemed a higher risk by lenders.

This factor is so important that it alone accounts for 35% of your FICO score, while VantageScore calls it “extremely influential.”

The best way to keep your accounts in good standing is by making at least your minimum payments on time on all your credit accounts. If you want to build your score, go a step further: Pay on time and use less than 30% of your credit limits on all accounts.

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What payment history consists of

Payment history is a collection of information listed on your credit reports. Credit scores are generated from the information in your reports.

According to FICO, payment history consists of the following items on your credit reports:

  • Payment on account types: How timely your payments were on different products like credit cards, installment loans and mortgage loans.

  • Public records and collections items: Whether you have bankruptcies, accounts in collections or lawsuits listed on your credit reports.

  • Details on missed payments:

    • How many days past due your payment was (30, 60, 90, etc.).

    • The amount owed.

    • How recently you missed payments.

    • How many missed payments you have.

  • The ratio of “good” accounts to “bad”: The ratio of accounts you pay on time to those you are behind on matters. If you have one or two accounts that show a late mark but five or six others that are on time, the scoring formula takes that into consideration.

VantageScore 3.0, which is a FICO competitor and the free credit score that NerdWallet offers, says payment history is made up of a person’s repayment behavior — namely whether on time or delinquent, and whether they have derogatory marks on their reports such as accounts in collections.

How payment history affects your score

Late payments can go on your credit reports and affect your score only if you are at least 30 days past due. You may have to pay your lender or card issuer a late fee before then, but it can't legally be reported to the credit bureaus.

Once you go past the 30-day mark, the late payment will show up in your payment history. The longer you go without paying, the worse it is for your score.

Conversely, if you pay all your bills on time, you will have a good payment history and your score will benefit. There are other factors that go into your score, too, such as how much of your available credit you use and the types of credit you have. But because payment history is the most influential credit factor, it’s very hard to have a good credit score without a solid payment history.

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