How Does Payment History Impact Your Credit Score?
Your FICO credit score depends on five categories of information, and payment history is the most important. If all your credit accounts show flawless payment histories month after month, it can help you achieve an excellent credit score. On the other hand, a history of late payments or other derogatory payment history information can have a big negative impact.
It's a popular misconception that the FICO credit score is based only on your payment history -- that is, how well you've paid your bills on time. While your payment history is the largest component of the FICO scoring formula, it is one of five categories of information that are considered when determining your FICO score.
Establishing a history of on-time bill payments can help you achieve excellent credit. Image source: Getty Images.
Source: Fool.com
