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Payment History;
A Crucial Factor in Your Fico Score

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May 2007

So…you all made it through the another newsletter!! Now you have an understanding of what a FICO score consists of and why you need to improve it. Don’t get frustrated… we are going to work at this together and over time you will start to see positive results, guaranteed!!

By now you should have had or at least scheduled your appointment with your financial specialist that has been assigned to you. They may have called you and discussed your scores with you or you may have gone into the office and sat down and looked at your scores and figured out what is causing the most problems for you. If so, you have a structured plan and an idea of what you are starting with and at the very list a few things to start working on in the near future.

As I mentioned earlier, the 5 most important factors that are considered in the credit score formulas are:

Your payment history
The amount of money that you owe
The length of time you have had credit
The type of credit that you have
How many credit Inquires

Well…Let’s Dig In…….No better place to start than #1

So, what do I mean by your payment history? This includes all the past records on your accounts. The history of both negative and positive payments. Those things you paid on time and those that you paid late or did not pay at all. It looks at any payment and includes:

	On Time payments
	Late payments and outlines 30days late, 60 days late, and so on
	Collections
	Repossessions
	Bankruptcies
	Liens
	Foreclosures

So, in the past if you owed any money to a creditor, they report if you pay on time and if you pay late.

Fico scores an amount for payment history and determines they following:

First, did you pay it back ,Second did you pay it back on time ,and Third if you did not pay it what was filed (like a foreclosure, bankruptcy or collections). Each of these filings will affect your score by either improving your score or worsening your score.

Many people think they just have to pay it back…that is not the case if you want to improve your credit. You need to pay it back just as your agreement specifies- the amount needs to be at least the minimum payment and the date needs to be on the date that it is due or before, otherwise it can hurt your score.

The more recent activities have a greater impact on your score. Therefore if you just went through a foreclosure or a bankruptcy your score will be affected in a negative way more now and less in 6 months and better after a year or more, especially when you make payments on time after such a bump in the road.

Ultimately the best way to improve your “Payment History” score is to make your payments in full (the amount due) and on time from now on.

And if you do have collections??….Then, let’s deal with that possibility. Transform the past mistakes into a future of improvements! You should pay them. If it is your debt….you should pay it back! And it is recommended that when you pay them you do the following:

	Go to the establishment that you owe( the orginal debtor, not the collection company that has been calling). Go to thier customer service/payment department. Have your collections letter with account number with you. Tell the person you want to pay the collection in full but before you will do that they need to give you a letter on the establishment’s letterhead (must be on their letterhead). The letter should have your full name, your account number as is on the collection and that the account is closed and has been paid in full on that date and signed by their representative.
	You then bring this letter to your financial specialist assigned to you and they will fax it to the appropriate person and have it removed from your credit report within 2-3 days. Keep the original for your records as well. If you are not yet with a finance specialist you can send in a copy to each credit bureau and request the collections be removed from your report as it has been satisfied and paid in full.
	Do not let the establishment tell you they will send you a receipt. YOU MUST GET THE LETTER ON THEIR LETTERHEAD AT THE TIME OF PAYMENT. Do not let them tell you they will report it as paid, that may take forever or get lost in the shuffle.

Plug away at your collections from the most recent one to older ones. Because remember what I said earlier- the more recent activities affect your credit most.

The saying “history repeats itself” is very appropriate here. That is what the credit bureaus are reporting. So let’s give them something positive to put in your history…You Can Change Your History!! You want your scores to reflect a positive payment history. Your want future creditors to see that you make your payments and you make them on time.

You do not wait until the due date to mail your payment, you mail ahead of time so that it arrives and is processed by the due date. When you start paying like this your scores WILL go UP!

OK…pull out your paper and pen. Write out what bills you have, don’t forget any types of collections. What date are they due? How much are the payments? Now organize your budget so that you will make the correct amount of payments on time or early every time. Save up to pay off collections in full and go through the process I outlined above for collections.

Here’s an EXAMPLE :

Bill/Payee	Amount Due/Total Due	Date Due	Date to send payment
Rent	1195	1^st of month	28^th previous month
Down payment	200 / 5000	15^th of month	12^th of month
Utilities	93	12^th of month	10^th of month
Car	354 / 9350	5^th of month	1^st of month
CitiBank Visa	57 / 2350	1^st of month	27^th of month
Collections Dillards	250	In collections, overdue	Save at least $50 /month and pay when total reached

Now you have a plan outlined STICK TO IT !!

So…decide to make the change … Get started today ….And Improve Your Payment History!!

Dedicated to improving your credit and making you a home owner,

Lori
Swiftcurrent Investment Group, LLC
www.EZQualDreamHomes.com
719-648-5223

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Payment History; A Crucial Factor in Your Fico Score

Payment History;
A Crucial Factor in Your Fico Score