Payment History Your Best Action

By: Roger A Lee

Given the choice between a longer credit history and a better record of on-time payments, experts say you should always strive to demonstrate that you pay bills promptly.

Payment history always trumps age. Late payments are far more important to credit scores than how long an account has been opened. That's because of how credit scores are calculated. For example, the widely used FICO credit score considers payment history to be worth about 35 percent of your score, while the length of your credit history is worth about 15 percent. Your mileage may vary, as they say, depending on what else is on your report.

The reason longevity is important is to see how you managed your accounts during good times and bad. Unfortunately, in this case it was not handled well. Regardless of what caused you to become delinquent, you should take steps to improve your payment history. Otherwise, it won't be only your credit score that suffers. The charge-off will also be seen by landlords, employers and some lenders who look past the score and view this type of activity as a red flag. In other words, that unpaid account could impact your ability to rent apartments, land jobs and borrow money. That knowledge should fuel your drive to delete that charge-off.

There may be a reason for the continued appearance of an account that became delinquent back when President George H.W. Bush was in office. Otherwise, it should be long gone. If the account became delinquent in 1990 and was never again current, the lender likely would have charged off the debt long ago, and it would have been deleted automatically. Under the Fair Credit Reporting Act, missed payments can remain on a credit report for up to seven years

Be a smart consumer pay your bills on time, pay more than the minimum and keep your history clean. These scores are important in every aspect of your life. You never know how long they will be around or how they will get you when you least expect it. Be careful and be smart. Try to stay out of debt, but if you do have a budget and a plan, your credit score is valuable, protect it.

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Barry Norman is a contributor to and blogger at For over ten years has provided consumers free information helping them make sense of credit cards and the financial industry. Whether you are a longtime cardholder or looking for your first credit card, can help you make informed credit decisions.

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