topic Re: Percent On Time Payments in General Credit Topics

Percent On Time Payments

Anonymous — Mon, 19 Sep 2016 17:15:53 GMT

One of the few areas of my credit that I really need to work on to improve my score in a significant way is Percent On Time Payments. The only thing I can really do is continue to make on time payments going forward and let the percentage climb as new on time payments accumulate and old late payments drop off. I have 4 accounts with various 30 day late entries from about 2 years ago, so it'll still be a couple of years before those stop hitting me so hard. In the mean time i'm trying to ensure I get as many on time payment entried accumulated as I can. I recently established a couple of new lines of credit with introductory 0% on transfers and I moved all of my high interest balances over to them. I now have two cards with balances on them and i'm paying them down as quickly as I can in that introductory period. I have one rewards card that I use to pay all of my regular monthly bills then payoff at the end of the month, and I use another rewards card for all of my usual monthly out of pocket spending which also gets paid off at the end of the month. The rest of the cards I intend on using once of twice a year to keep them open.

My question is this:

If I have a card that has a zero balance and zero payment for 6 months, will that lender report OK each month in which I have no balance and no payment or will that month just show up as U (unreported). I had originally planned to use each of these cards once each a month on something I was already going to spend money on just to ensure a positive payment history, but is this necessary? Am I creating unnecessary hassle when I could simply use them twice a year to keep them open?

Re: Percent On Time Payments

RobertEG — Mon, 19 Sep 2016 17:59:59 GMT

Creditors vary in how they "report" accounts with no activity.

They can simply report the current status and balance, or they can remove the account from their regular monthly update cue if it remains unused for a certain period.

I would use the account at least once each 4-6 months or so to ensure updated reporting of usage.

FICO can discontinue inactive accounts from scoring.

Re: Percent On Time Payments

RobertEG — Mon, 19 Sep 2016 18:00:00 GMT

Creditors vary in how they "report" accounts with no activity.

They can simply report the current status and balance, or they can remove the account from their regular monthly update cue if it remains unused for a certain period.

I would use the account at least once each 4-6 months or so to ensure updated reporting of usage.

FICO can discontinue inactive accounts from scoring.

Re: Percent On Time Payments

Anonymous — Mon, 19 Sep 2016 18:12:05 GMT

So I guess I should put the extra effort in each month to make sure each card gets used, and has at least a small payment to make sure I make the quickest progress possible in improving my Percent On Time Payments. Thanks for your help!

Re: Percent On Time Payments

Anonymous — Mon, 19 Sep 2016 18:37:44 GMT

Percent of on time payments is pretty much irrelevant. I imagine you are talking about what you see on Credit Karma or something where they tell you your percentage? It's meaningless under FICO scoring. FICO scoring cares about whether you have any late payments... how many... what severity they are... and how long ago they were. All of the good payments you have don't matter and don't factor into some equation.

A few months ago on Credit Karma my "percentage of on time payments" was 90% or 91% which was "very poor" - Mind you I have a 90 day late that 's almost 2 years old and a 120 day late that's over 3 years old. When my CK info updated this past weekend, I noticed that under my "payment history" my percentage is now 100%, "excellent." Those 2-3 year old late payments still exist and under FICO scoring will adversely impact me for 7 full years. So, this would lead you to believe that under Vantage 3.0 scoring (which CK uses) that late payments impact your score for less time. Not the case. My CK scores didn't budge even though their cutesy chart would indicate that my payment history is dramatically different now than a few months ago in going from "very poor" to "excellent."

My point is don't worry about percentage of on time payments. Worry about how many you have, how old they are, and how severe they were. Then take steps to attempt to get them removed so that they don't impact you for the full 7 years. That's the best advice I can give.

Re: Percent On Time Payments

Anonymous — Mon, 19 Sep 2016 18:51:20 GMT

Yea, I was looking at CK's Percent On Time. So as far as late payments go on an actual FICO score, nothing outside of having them removed or having them age off my report will affect that part of my score?

Re: Percent On Time Payments

Anonymous — Tue, 20 Sep 2016 00:31:34 GMT

Correct. Having X number of late payments is X number of late payments. The only thing that matters is the criteria I spoke of above... their severity, how many of them there are and how old they are. It doesn't matter if you have 100 on time payments or 1000 on time payments to go along X number of late payments. The focus needs to be not acquiring late payments, and if you do, jumping through whatever hoops are necessary to get them removed. Simply showing a ton of on time payments following late payments isn't going to improve your score. Your score WILL improve in time, but that's simply because your current late payments are getting older and as a result their impact isn't as great with respect to scoring.