Five Factors Of Credit Scoring -- Payment History Main Boise Home Loans
35% of your credit score is calculated by payment history...the largest percentage in your credit report.


Dear BuildIdaho.com Reader:

The largest portion of your credit score is derived from your history of on-time payments...or history of non on-time payments. Late payments or missed payments are huge red flags to creditors, and just one 30 day late can wipe out 75-100 points from your credit score! The bad thing about this is that creditors don't care why you were late with payments...you may have had a medical emergency or lost your job, but they don't care. You will be red flagged as a high-risk borrower simply because you were late on a payment.

The payment history portion of your credit score takes into account several factors:

1) Payment Information -- this includes payments on credit cards, department store cards, car installment loans, mortgages, etc. It includes the payments you made and the dates that the payments were posted by your creditors.

2) Delinquency -- this shows HOW late your payments are. A 30-day late payment hurts you, but a 60-day hurts more, and a 90-day hurts even more...etc.

3) Derogatory Public Records -- reports bankruptcies, judgements, tax liens, etc. The older the item, the less damaging it is to your credit score.

4) Past Due Amounts -- any amounts on open AND closed accounts that show past due will hammer your score.

Understand, the older your late payments are, the less they hurt your score. A late payment in the last 12 months will hurt you the most, but less severly after 24 months, etc. In the industry, we call this "seasoning."

Next time, I will discuss the unfortunate situation of Universal Default...the scenario by which all of your creditors come back at you for making a late payment to any one creditor.

If you are interested in talking more about this post or a specific credit scoring issue you have or know about, feel free to call me at (208) 880-0316, or email me at [email protected]. You can also visit my website at http://www.ericsloans.com.


Eric Leigh, Mortgage Consultant
2965 E. Tarpon Drive, Ste. 150
Meridian, ID 83642
(208) 880-0316
[email protected]
Posted by Eric Leigh at 3/13/2009 4:51:00 PM
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Comments (2)
Re:Five Factors Of Credit Scoring -- Payment History
Eric, it might be interesting to hear what the impact on ones credit would be to skip 3 payments on their home in order to "qualify" for some of the government programs to refinance that home. It seems like there are some people out there that are being told that is what they need to do, or at least it is implied.
Posted by on 3/13/2009 10:16 AM
Re:Five Factors Of Credit Scoring -- Payment History
The impact on your credit score by "skipping payments to qualify for a government program" would be devestating. I had a client recently who came in with one 30 day late payment on his account that was reporting in error...the score was a 678. After disputing and removing the late payment by a process called "rapid rescoring" his score climbed to a 784. Three lates plus more than 30 days would kill the score.

I think you might be referring to loan modifications when you say government programs, because any government refinance program that happens will definitely require a qualification process. A loan modification thru your existing lender/servicer can be done without a credit inquiry, but not guaranteed.

In my opinion, anyone advising a person to "miss payments" in order to get a lender to work with them or to qualify for a program is being misled. In additon, Hope For Homeowners states that a homeowner cannot intentionally miss payments, or they won't qualify.

If you have a specific question regarding this troublesome situation, please call me at (208) 880-0316.

Posted by Eric Leigh on 3/13/2009 2:40 PM
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