It probably wouldn’t surprise you to hear that credit-scoring models are complicated. There are a bunch of metrics provided by the major credit bureaus  to determine your scores. However, the generic scores that FICO and VantageScore create both consider payment history to be the most important category when calculating a credit score.


What’s in your payment history?

Your credit reports include a variety of information related to different credit accounts and public records. The payment history portion is all the data that’s related to your history of making or missing payments, and you can think of the data as being positive or negative/ 


Payment history can help or hurt your credit score. It all depends on that payment history.


Aspects of your payment history that help your credit score:

  • On-time payments
  • Consistent on-time payments
  • Multiple accounts with on-time payments
  • Long-term accounts with positive payment history


Things in your payment history that will hurt your credit score:

  • Late payments
  • An indication of how late a payment was (e.g., 30-, 60-, 90-days late)
  • Charge-offs
  • Collection accounts
  • Settled accounts
  • Repossessions or voluntary surrenders
  • Foreclosures
  • Bankruptcies


It’s hard to say how any one of these elements will directly affect your score, though. It depends on the item and your overall credit profile.


For example, a single late payment might not actually lead to a drastic drop in your credit score if you have an otherwise lengthy credit history filled with on-time payments. Multiple accounts with late payments or falling far behind on a single bill could compound the problem.


How late is late?

Most creditors don’t report you as late the day you are overdue. Usually, they report you as late only if you are late when they normally report payment history to the bureaus. That means, you might have time to get a payment in before it hits your credit report. You might have a little leeway if you run into financial trouble. The important thing is to work with your lender.


Information can stay in your payment history for seven to ten years

Just because something is on your credit report, it doesn’t mean that it’s significantly impacting your score. Often, the most recent entries have the most meaningful effect on your credit score.


The Fair Credit Reporting Act (FCRA) is a federal law that governs how long certain information can remain in your credit report. Once something drops off your report it won’t impact your credit scores.


Most negative items fall off your credit report seven years after they’re reported to a credit bureau. If you were late multiple months in a row, the timeline starts with the first late payment and the entire sequence will be removed after seven years.


One exception is for bankruptcies, which may remain on your credit report for up to 10 years, depending on the type of bankruptcy.


Want to improve your credit?

There are several actions you can take that may help you improve your payment history and credit scores:

  • Open accounts that report to the credit bureaus
  • Always make on-time payments, even if you can only afford to make a minimum payment
  • Only use a small amount of your available credit limit on credit cards and then pay the bill in full each month


Payment history of a RISE loan

RISE focuses on working with borrowers who may have a mixed payment history and who want to improve their credit.


RISE reports to TransUnion so customers can build their payment history.


RISE also offers a free Credit Score Plus program, which you can use to track your TransUnion VantageScore. You’ll also get an alert if new information on your TransUnion credit report may impact your credit score.

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