Fico Score and Your Payment History

Posted on July 13, 2008

Your payment history is one of the most important factors in determining your FICO Score. The reason is based on the idea if you pay your bills on time,you are less likely to default. For this reason, payment history makes up 35% of your FICO score.

There are three factors that your FICO score considers when there has been late payments:

· Recency – This how it has been since the borrower has not paid their bills. The longer it has been the less of an effect.

· Frequency – It is how often the borrower has been late. The less the better is the rule here.

· Severity – This looks at how bad was the borrower’s lateness. Meaning, were they 30 days behind or 60 days. The less the number the better.

What carries more weight in your FICO Score? Recency is waited more than the others in your FICO score and you should try to stay current. The lesson is to pay on time. Not only will you not pay any fees or penalties because you are late, but if will be positively reflected in you FICO Score.

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