WHAT IS A CREDIT PAYMENT HISTORY?
The history of credit payments is the track record of your interest payments, including on-time, late and even skipped payments. One of the most significant factors affecting your credit score is payment history. This accounts for 35% of your credit score, followed by sums owed (30%), credit history duration (15%), and a new credit and credit combination, each accounting for 10% of your score. As a borrower, your payment history helps the lender to gauge the probability of repaying the loan. So, note that your payment history represents any unpaid bills, which in turn can influence your credit rating.
HOW CAN I SEE MY PAYMENT HISTORY?
Your lenders will notify the major credit bureaus, including CIBIL, Equifax, and Experian, of your monthly payments. What you need to do is ask any of these bureaus for a free copy of your credit report. To do this, you need to fill in the online application form in order to view your credit report. It is recommended that you check it carefully after you obtain the report to see if there are any mistakes or inconsistencies that could reduce your credit score. You will raise a conflict to settle it if you find any negative details alluded to in your paper. Request the form within 30 days of having your report in order to be on the safer side.
HOW IS YOUR PAYMENT HISTORY DETERMINED?
Your monthly payments are reported by creditors to the credit bureaus. Such reports provide whether or not the payments have been received on time. Each credit bureau has its own method of measuring the credit score, and from one office to another, the final score can differ.
HOW IS MY PAYMENT HISTORY RELATED TO MY CREDIT SCORE?
When measuring your credit score, credit bureaus use various criteria. Any late or missed payments made to the bureaus will be reported by the creditors. In your repayment history, this will be registered and will hurt your overall score for many years.
HOW CAN LATE PAYMENT HURT MY SCORE?
Your Credit Report includes the specifics, including the status of your account, of your account records. The lender can write-off the balance and report the same to credit agencies if you haven’t paid your unpaid credit card bills for over 180 days. You should also be aware of your DPD or Days Past Due, which shows how well your loan or credit card payment has been serviced every month. For example, your account may be listed as “Sub-Standard” if you have not paid your unpaid credit card bills for more than 90 days, which could bring down your credit score. If your account persists for 12 months or more as a “Sub-Standard,” it will be graded as “Doubtful.” This will do more harm to your score.
HOW DO I KEEP MY PAYMENT HISTORY CLEAN?
Paying your unpaid dues on time will keep your stain-free payment history. You can set monthly reminders so that you do not skip making your payments, or you can also sign up for autopay if you are not good at remembering the due dates. Make sure you have enough funds that are related to the autopay facility in your account. Try to keep a tab on your monthly expenditures, as well. This will assist you in a better way to handle your debts.
HOW LONG CAN NEGATIVE PAYMENT INFORMATION AFFECT YOUR CREDIT SCORE?
Your payment history on your credit reports could be influenced for a long time if you are unable to pay your unpaid bills. Late bill payments will remain for up to seven years on the ledger and accounts submitted to collections can stay for seven years as well.
It is probable that building a good payment history that will help tell your creditors that you pay your bills on time would increase your credit. By dragging your credit scores down and making you look like a higher-risk borrower, late payments can damage your payment history. You will create a good payment history on your credit reports if you pay your bills on time, and you could improve your chances of receiving credit when you need it.