Paying Bills on Time and the Payment History Segment of the Credit Score

Written by admin on April 10th, 2011

This is the breakdown of the FICO Score:

-35% Payment History

– 30% Amount Owed

-15% Length of Credit History

-10% New Credit

-10% Types of Credit Used

The Payment History section takes up the biggest portion of the score and that’s also the part that is sensitive to delayed payments, in fact, the better the credit is, the more it reflects late payments.


What is considered late payment?

30 days. 60 days.


Does it mean that it’s okay to be delayed for days or weeks?

No, the creditors would fine with late fees and interest.

When do creditors report the delayed payments?

At about 90 days overdue, and It would not matter to them how much you owe, because all they’d take in, is that you are 90 days past due.


What is the difference between being late 30, 60 days to 90?

30, 60 days would not appear on the report, but 90 days might have a lasting effect.


How are the scores calculated?

The scoring system is a tough topic to discuss. FICO has different editions and the three credit reporting bureaus are using different ones. The lenders also have their own credit-scoring formulas or are using an older FICO edition.


Is FICO the only scoring model?

Not really, but it has been in use for a while, and it takes time and money to switch to another. Which perhaps is VantageScore, which the three leading credit reporting bureaus: Experian, Trans Union, and Equifax have developed. As to whether or not it can break  FICO’s strong hold on the credit scoring system, remains to be seen.

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