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A lender wants to know your payment history. Have you paid everything on time, are you late on anything now, etc…? Your payment history is just one piece of information used in calculating your score, although it can be the very important (heavily weighted).
- Payment history on your accounts. These include credit cards, retail accounts (department store credit cards), installment loans, finance company accounts and mortgage loans.
- Collection items and Public records—this includes judgments, bankruptcies, suits, liens, collection items and wage attachments. Most of these are considered quite serious, although older items will count less than more recent ones.
- It's all in the details. This includes specific details on late and missed payments. Negative information/late pays are determined using three factors.
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- Recency - How long ago was the last delinquency? How old is the late pay? A 30-day late payment made just a month ago will affect your score much more than a 90-day late payment from five years ago.
- Severity - What level of delinquency was reached? How late was the payment made? 30 days, 60 days, 90 days or worst of all, is the payment still outstanding?
- Prevalence - How many credit obligations have been delinquent? The amount of negative items as compared to your total amount of available credit effects on your credit score. For instance, a report of 5 accounts showing 3 late payments is much worse than 10 accounts showing 4 late payments. One of the biggest sub factors is how many accounts show no late payments. A good track record on most of your credit accounts will increase your over all FICO score substantially.
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