Past payment credentials – up to 35%
This is in fact the top concern of potential lenders: Will you pay them back, and on time? To determine this, they may consider the following factors from a credit report to gauge your financial trustworthiness:
- Do you pay your bills, loans, and credit card payments on time?
- If you have been late, is this a consistent problem? The longer you have delayed, the more the negative impact on the credit score.
- Do you have a history with credit or debt collection, bankruptcy, foreclosure, or lawsuits due to delayed or non-payment?
To lenders, late payments may be due to financial instability, but non-payments indicate unreliability. However, they will still consider your recent history before finalizing your credit score.
Therefore, if you declared bankruptcy five years ago but have a clean payment history for the past year, your financial credibility can be salvaged.