“Health is Wealth”. Your credit score represents your financial health. Like good food is very important to be healthy, a good payment history is very important to be financially healthy.
If you have never used credit before, it will take a minimum of three to six months to build a scorable credit history. And your payment behaviour plays an important role towards building a good credit history. Payment history contributes up to 40% of the overall rating. Here is what goes into it:
- The number of repayments you have always paid on time.
- How many days past due(DPD) you are on delinquent accounts.
- Legal action taken on delinquent accounts.
- The number of accounts for which you are currently at least 30 days delayed on payment.
- How many accounts are being paid as agreed.
Your payment history comprises many complex components, which can confuse consumers. But experts say that ultimately, it boils down to never missing a payment.
Your payment history should always be a top priority for you when it comes to your credit score. It is the category that carries the most weight and can be the hardest to fix since it sometimes just requires the passage of time. Always do whatever you can to pay your bills on time and if you miss a payment try to mitigate the damage done by paying it as soon as you can.