The most important factor regarding your credit score is your payment history.  Your ability to pay your accounts on time reflects 35% of your credit scores.  The credit scoring model certainly wants to know that you are paying your accounts as agreed.  The last 6 months are the most important time frame.  As time goes on older accounts and reportings have less weight to your score.  Although many factors come into play, a very recent hit to your credit could drop a score 50+ points

A credit report will usually show at minimum these catagories; 

• Past Due
• 30-days late
• 60-days late
• 90-days late
• Collections
• Public Records, such as Judgments, Bankruptcy, Tax liens

Past due accounts are accounts that are 1 day past due.  They will negatively affect your credit score while the account shows "past due".  If the account reports as paid before hitting the 30-day mark, then the past due amount will not show past due, and you won't have a long term credit hit as you would for a 30+ day late.

Credit reports have no "memory".  It is snapshot of what appears at the time the report is requested. 

30-day lates and greater are more permanent dings to your credit score. The worse the late period the more damage it does to your score.  For example, a 90-day late is worse than a 30-day late.  Accounts that go beyond 90+ days may eventually show up as collections or judgments.

Collections are among the worst for a credit score.  If you are looking to maximize your credit score, here is a rule of thumb.  Collections less than 2 years old pay off, as it should benefit your credit score.  Collections 2 years or older,  leave alone until you can pay them off at settlement (assuming you are buying a home).  Very Important - paying a collection over 2 years old will negatively hurt your credit score.  Essentially what happens is the account is brought to a current status, and as stated above, the more current the derrogatory mark, the more it hurts your score. In all cases, be certain to obtain proof of the account's pay-off in case it is needed in the future.

A few more notes regarding payment history ...

The highest weight is attributed to the highest pay account.  For example, a 30-day late on a mortgage for $2,000/month is worse for your credit score than a 30-day late on a JC Penney card for $10/month.  

Judgements, bankruptices, and tax liens do not keep you from purchasing a home.  Even someone in a bankruptcy chapter 13 can, with permission from the trustee, obtain a home mortgage.  For more information regarding judgments, bankruptcies, tax liens, and anything else regarding credit just call or e-mail me.  I have great respect for people who take the time to restore their credit, and I will do my best to help.  And if you are working hard to make it better, work equally hard to make sure you are doing it RIGHT! ~ Steve Kappre

If you missed the other installments on credit check out "Credit Scoring -What Makes Up My Credit Score?"

 Credit Scoring - What Makes Up My Credit Score? (1 of 6)

Credit Scoring – Payment History (2 of 6)

Credit Scoring - Balances (3 of 6)

Credit Scoring - History (4 of 6)