FICO Score Dinged by Late Payments?

I never knew this, but he number one reason for a lower FICO (credit) score is that people make late payments. Even more interesting is that the “ding” received on your credit – or the points deducted from this all too important score, is even higher if you have really great credit than if you have just average credit.

I know it seems counter intuitive, but they really stick it to you if you have an awesome credit score and you happen to have some late payments sprinkled in there. Something to remember the next time you think a slightly late payment won’t blemish your record!

And that’s not all either. Apparently, since the mortgage and economic crisis has started, credit scores are much more stringent. They will ding you harder for smaller offenses, and also creditors are really increasing the standards by which they rank you. In other words, if you credit score fell into a certain range before, it may qualify you for the best credit deals going yesteryear. However now, you need a higher score than you did before to achieve those better deals.

Payment history, which includes any late payments you’ve made on loans, credit cards, and other credit instruments, do follow you for quite some time. And since they account for just over 30% of your FICO score, it’s well worth your time to manage these aspects of your finances closely. Especially nowadays.