Understanding Payment History On Your Credit Report

Credit Score Payment History

Ever wonder what a late payment does to your credit score?  If you’re ever late for a bill that reports your activities to a reporting agency, you might have seen your credit score drop.  One late payment could have a steep and negative effect.

Your payment history is the most important part of your FICO credit score. It represents the largest portion of the score, coming in at 35%.  Compared to the credit mix portion of the score, the payment history is at least three times larger than the credit mix. 

What is the Payment History?

Payment history is your record of payment to the creditors and lenders.    Simply put, your record of payments are reported to the major credit bureaus like Experian, Equifax, and TransUnion.

What’s reported is how late your payments were, how much you owed, and the number of late payments.

What’s important to note is that your credit payment history can be on your records for a long time.  So if you have a ding in your payment records, the major credit bureaus will hold them for up to seven years.   Unless you dispute and get the delinquency removed, the record stays pretty much for the long term.

To see if you have any blemishes on your payment history, check a credit report service like Credit Karma or free credit reporting site such as AnnualCreditReport.com.  The reporting companies can provide a detailed guide to your payment history.

Derogatory Public Record

Experian defines this as public record information that shows up in your credit report. Common public record items include bankruptcy and judgments.   If you have declared yourself bankrupt, the record does go on your record for a quite a while, whether it’s a Chapter 7 or Chapter 13.  This status will stay on your records for ten years.  

Be sure to plan your bankruptcy if it serves your interest. Typically, a bankruptcy can immediately drop your score from the 700s to the 500s, so this is no easy change.

For people who were sued by a creditor and lost the case, you’ll often find a judgment associated with your account.  Judgments occur if you don’t pay what you owe and a creditor wins a suit against you. The judgement is placed on your file and, and as long as you don’t fulfil your obligation, the judgement stays on your record.  How long it stays in your record can vary from state to state.

Good Payment History

To get in the good graces of the bureaus and have a good payment history, simply make sure that you pay on a timely matter. Most experts weigh in on this and say that you shouldn’t even consider making any payments late.  As stated, reported late payments will stay on your records for seven years.

By regularly checking your credit history, you can make sure that these blemishes aren’t in your records for the long run.

Payment History Strategy – How To Improve your Payment History

Automated Payments

So how do we get to a point where we’re pretty confident in making timely payments to improve our score? One easy method to make sure that your payments are on time is to automate the billing process.  This can be done through major bank accounts and creditors.  For instance, you can get your credit card company to automatically withdrawal the minimum balance or specified amount on a monthly basis from your bank.   Most mortgage companies even offer this service as well.  The key here is that automated payments make it easy and effortless. 

Contact the Lender or Creditor to Remove Late Records

If payment is not paid on the due date, it doesn’t necessarily mean that you’re done.   Some creditors or lenders may even provide a grace period where they don’t report the late payment.   If you have a payment that is late, consider working with the lender.  For some, you’d be surprised on their willingness to work with you.

Dispute Late Payment Records

Believe it or not, late payments can be disputed.  There are a number of ways that you can dispute late payments.  One of the common methods is going to the credit bureau directly.   Experian has an easy line item dispute. If there’s something you believe is incorrect, you can dispute it directly with the bureau.

Contact the creditor.  Sometimes the lender can be incorrect.  By issuing a letter or a phone call, you can argue that you paid your account on time and you request that the late payment is removed.

If your account was transferred to a collection agency, you could also negotiate with the agency to get any late payments removed.  The agency may even work with you to lower what is owed.  Remember, credit agencies buy your debts by the pennies on the dollar.  They have a lot of wiggle room to renegotiate.


The credit payment history is clearly the most important part of your FICO credit score.  Any late payment could alter your score considerably. 

Take the time to review your credit statements or bills. By developing a strategy to make sure that your bills are paid are time, you may be on the road to greatly improving your credit score.

More Information

Understanding Length of Credit History

Understanding Payment History On Your Credit Report

Understanding Credit Mix

Understanding Credit Utilization

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