FICO Score Category 1 – Payment History
They are: your payment history, amounts you owe, length of your credit history and types of accounts used.Your payment history is a major decider of what your score will be. This is wrong way and an incorrect way to think about improving a FICO scoreThe first reason why this will hurt your chances of getting a good FICO score is the based on the FICO formula itself. As a result, this is the most heavily weighted of the categories.A person’s credit score is primarily affected by the last 24 months of his or her payment history. A late payment on one credit card when there are only 3 pieces of information on your report is going to have a greater impact that if you have 20 pieces of credit on your report.
The idea is to get the creditor to report your account after the settlement as “Paid as Agreed” or “Account Closed – Paid as Agreed”, not Paid-Settled. ‘ That means paid on time. – A single 30 day late will negatively impact your score. Even one late payment can have a huge impact on your score. There is a tradeoff here between convenience and possible savings and a credit score drop.Paying off a car early. Just don’t pay too early – watch the closing date on your statement.How many times have you paid one or more accounts late?
Many times accounts that are older but that you paid perfectly are not listed on the report. Collectors may not harass you by calling numerous times a day about an unpaid bill. Review all accounts positive and potential negative accounts check for balances, account opened date, any late payments, and make sure your account number is reported correctly.D. Late payments – listed as 30 days late, 60 days late, 90 days late, and 120+ days late.Charge offs – Accounts that are in default and which the creditor has charged off and reported as a loss. If you find that you do have a couple of lates here and there, it may be worth it to you to give those lenders a call and see what they are willing to do for you. However, even one 90 day late will look like a lien or bankruptcy so avoid these if you can!How recent was your last late payment?
They are looked at for how often you are making late payments, how late were you when you made a payment, and how recent was your last late payment.The next part of the fomula is how much you owe. Recent late payments will hurt your score more than a late payment two years ago. Also, the better your score is to start, the more a single late can negatively impact you.Are there any ‘delinquencies’ on the public record – bankruptcy, liens, suits, collections?
These include public records, wage attachments, law suits, liens, the credit cards that you have had before, car payments, home mortgages and several other debts and utilities. These stay on your report for 7-10 years and will impact your score for at least that long.How much is past due?
Pay Off Past Due DebtDebts that are past due or in collection present you with the perfect opportunity to fix credit fast. Even though the past due amount is only $25 it is still past due and has been paid late the last 3 months. An R1 or I1 means revolving, pays as agreed – or alternatively, installment loan, paid as agreed.
Getting instant points added to your total score ought to be quite an easy task.
Try to understand these five factors in order to control some of the impact and outcomes your debt and credit profile have.Payment History: 35% impact on score.
Again, a significant portion of your score is predicated on the amount you owe, relative to the amount of credit extended to you, in aggregate.