Understanding FICO® Scoring

[redhouse69]

Is there any set time intervals where you might see a boost in your credit score after a new car loan or home loan paid ontime every month?

6 months 

1 year

2 years

etc?

Thanks

[llecs]

FICO really doesn't reward you for on-time payments. Absent all other factors like age, other accts, etc., you wouldn't see any score improvement by paying on time over a month, a year, 10 yrs, etc. However, as the account ages you could see some gradual imrpvements, a few here and there.

[redhouse69]

Sure I understand it is assumed that payments will be made on time.

I'm coming up a year on on my car loan and noticed an increase at the 6 month point after taking a small hit when the loan was opened.  i.e hard pull and lower average age.

I'm now very close to securing a new home loan and anticipate something similar with the score being lower and then bouncing back and then eventually benefiting from a another line of credit...

Any input?  Thanks for your responses.

[bettercreditguy1]

The small uptick when it occurs between six and twelve months is usually the aging  of the new account inquiry/beginning reporting.  YMMV dependent on what else is in your file. If it is very thin, then you may see an additional increase.

[mtrsprt]

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llecs wrote:

FICO really doesn't reward you for on-time payments.

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You should re-word that. The most important thing factoring your score is payment history.  On time payments being the target.....   More payments (On time), more time/age = Higher score.

[Shogun]

It is worded right, but could be taken wrong.

You are awarded points for your AAoA.  But on time payment is expected.  It's only when payments are late or not made that will affect your score.

[llecs]

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mtrsprt wrote:

You should re-word that. The most important thing factoring your score is payment history.  On time payments being the target.....   More payments (On time), more time/age = Higher score.

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 Ditto to Shogun. Paying on time won't increase your FICO. Added "OKs" in the payment history won't increase your FICO. However, conversely, paying late will drop your score as we all know. The OKs are ignored but not the lates per FICO. With everything being equal with no added TLs, dropped TLs, no inquiries, no changes in accounts, etc., you will see small and gradual improvements in score as those TLs age, but that's aside from the payment history and has to do with the length of history and any change in AAoA.

Now under a manual review, if you have decades of OKs and one 30 day you won't be viewed as risky as someone with only a year of history and just one late. FICO addeesses that in a sense with the scoring buckets. Someone with decades of perfect history will take a bigger beating in FICO than someone with a short history.