Steve and Lisa's Mortgage Morsels

The 5 Components that make up a FICO Score: Part 2-Payment History

January 13th, 2012 9:50 AM by Steve Iltis

35 percent of the total credit score is based on a borrower's payment history, making the repayment of past debt the most important factor in calculating credit scores. According to FICO, past long-term behavior is used to forecast future long-term behavior. FICO keeps an eye on both revolving loans -- like credit cards -- and installment loans, such as mortgages or student loans. Although the weight of each loan varies between individuals, FICO indicates that defaulting on a larger installment loan like a mortgage will damage a credit score more severely than defaulting on a smaller revolving loan. One of the best ways for borrowers to improve their credit score as a whole is by making consistent, timely payments.

Have a great weekend everyone!


Posted in:General
Posted by Steve Iltis on January 13th, 2012 9:50 AM


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