How Does Payment History Affect Your Credit Scores?

Payment history is your track record of paying your credit accounts. It's the most important factor in your scores.
By NerdWallet 
Edited by Sheri Gordon

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Your credit scores are compiled from information in your credit reports, and several factors determine your scores. Payment history is the single biggest factor that influences your credit scores.

What is payment history?

Your payment history is a record of your payment behavior on all credit accounts, such as credit cards and loans. It gives lenders a snapshot of how you paid your bills — did you pay on time, did you miss any payments, was your debt 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 contributes to payment history

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.

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.

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How payment history affects your scores

Late payments typically can go on your credit reports and affect your scores 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 they generally won't 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.