How Payment History affects your Credit Score May 23, 2018

How does your payment history on loans affect your credit score?? ?The obvious answer is if you pay bad, then your credit is bad, and vice versa.? Here is some more information.? This section of your credit score is weighted the heaviest, coming in at 35%. It focuses on the history of your payments. It is said that if you have a perfect credit score (an 850) a single 30-day late can lower your score by 175 points. That probably doesn?t seem fair does it? But think about it this way; if you were lending your own money to someone, and you had to choose to lend money between one person who had a single 30-day late last month and who, as a result, now has a credit score of 700 versus a different person who went bankrupt 5 years ago who also has a credit score of 700, who would you lend your money to? You would choose the aged, bankrupt client because current risk is much more relevant than risk that happened 5 years ago. Sure, the client who went late last month might have just had a moment of forgetfulness and simply forgot to pay a bill.? Or, they could now be in serious trouble and this 30 day late payment is the start of that serious trouble? That doubt makes you pucker up a little bit if you are lending your own money. Regardless, getting robbed 175 points on a perfect credit score because you just went late may not seem so bad. The good or bad news is that no one is really losing quite 175 points, because they didn?t have an 850 to begin with. Either way, I suggest not going late – ever!