How Does Payment History Affect my Credit Score?
With so many factors determining your credit score, paying your bills on your time is one that plays a major role in your credit profile. Its a factor that most lender look at to determine how many times you were late, the amount of delinquencies, and reliability of you paying on time.
Well, have you missed a payment by a few days or even a week? Most of you have and wonder why it doesn’t show up when you pull your credit report. It’s because with personal credit reports, your payment activity falls within a 30 day category. They expand out into 60, 90, and 120 days brackets of being late.
Most lenders do not report the late payment unless its exactly 30 days or more late. However, you don’t want to be late all the time or at all since your lender will and can charge you an expensive late fee, and increase your interest rate.
→Just pay on time! Reduces any issues later on that is associated with late payments.
Late payments affecting your score
Now there are few things you need to know about having late payments. Most importantly, if you do miss a payment for whatever reason and is reported to the credit bureaus. The incident will stay on record for seven years!
One single late payment can drop your score by at least 50 points
How do you evaluate your late payments
- Longer the payment, the larger the severity of the late payment. 90 days late payment is evidently worse than having a 30 days late payment.
- The more recent the incident, the larger effect on your score.
- The frequency of incidents of late payments
- Late payments in the last two years have the greatest impact
How do you fix your payment history?
If you were actually late on your on own accord, then you usually have to just let the late payment age until the record doesn’t affect your credit score as much. Just be sure to have a stellar payment history from that point on, as having a good history will help cushion some of the bad history.
If you do have any information on your record you believe is incorrect, you can normally dispute through credit service companies.
We recommend Lexington Law, for disputing any records you may find to be inaccurate or unfairly recorded. They are one of the nation’s top Law firm offering effective credit repair services. They have been around for over 10 years making sure their reports are far and accurate. Be sure to check out our review on them.