Understanding Payment History & Authorized Users

[Anonymous]

Hello,

One of my recent discussions with a friend of mine was regarding how Payment History works. What I explained to them was that it's the percentage of On-Time payments vs the total # of payments due.

Example: 

- You have 1 credit card that's been open for 24 months which has 2 missed payments, meaning you are at 22/24 On-Time payments = ~92% payment history

They then ask if they added an Authorized User credit card to their report that has 20 years of history (240 On-Time Payments) would the payment history reflect, 262/264 = ~99%?

My question is whether or not this is a true statement in theory or if in real life this isn't the case. An example being the credit bureaus don't actually reflect the whole 20-year payment history on your credit report and instead only reflect 5 years.

I appreciate anyone's feedback in advance!   

[Slabenstein]

"Percent of on-time payments" is basically CMS fluff.  For FICO scores, payment history is things like how many of your accounts have ever been late, how many lates you have reporting, what severity, and how recent they are.  Lates on AU accounts that aren't being ignored by the anti-abuse algo's would be scored as a part of those metrics, and you can't "swamp" negative payments by increasing the number of positive payments.

[Anonymous]

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@Slabenstein wrote:

"Percent of on-time payments" is basically CMS fluff.  For FICO scores, payment history is things like how many of your accounts have ever been late, how many lates you have reporting, what severity, and how recent they are.  Lates on AU accounts that aren't being ignored by the anti-abuse algo's would be scored as a part of those metrics, and you can't "swamp" negative payments by increasing the number of positive payments.

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Well said and I do not believe there is a percentage of on-time payments Scoring Factor, either, but some do. And I think there is an exception where delinquencies could be diluted. 

It is true that payment history looks at 1. severity, 2. recency, 3. frequency, & 4. the amount owed on past due accounts, but there is also an 5. "accounts paid as agreed" factor that optimally wants to see 1. a certain minimum amount or critical mass of payment history and also wants to see 2. a variety of types of current payment history.

so if a profile had very few open accounts or a lack of variety/mix of open accounts, they may be leaving points on the table from the payment history category.

So if the delinquency were in a profile where there were a small number of accounts or a lack of diversity of accounts, adding payment history or payment history diversity may offer points from the payment history category. This is the only time I think you could really dilute it. 

I don't think it would help with a thick diverse file, imho. 

[Anonymous]

But that’s a small exception. And frequency only is tracked at certain bureaus.