Timing is everything in life, but this is especially true when it comes to paying your bills. How punctual you are in making payments has a huge impact on your credit score, and affects how lenders see you as a potential borrower. Read on to find out what payment history is, why it has such a big influence on your credit score and what you can do to improve it.

What is payment history?
Your payment history is a record of all your past payment behaviour, and indicates whether you paid each bill on time or late. Every month, your payments to creditors and certain service providers are reported to Credit Reference Agencies. The three main UK Credit Reference Agencies are Equifax, Experian and TransUnion.

Whenever you apply for credit, any lender’s priority would be to make sure you’re reliable and trustworthy and will pay back the money you borrow according to the agreement. 

As your track record of payment is a strong predictor of how you’ll repay in future, your payment history becomes one of the most significant factors making up your credit score. A payment history with few or no late payments paints you as a reliable borrower, while missed payments could indicate to lenders that you might be struggling to repay your debts on time, making you riskier to lend to. 

How much does payment history affect my credit score?

Credit Reference Agencies record your payment history on your credit report, so paying your bills on time is crucial for maintaining a healthy credit score. 

In fact, payment history is often considered the most influential element in your credit score as it accounts for up to 35% of the score’s calculation.

What kind of accounts are considered for my payment history?
Accounts that count towards your payment history include:

  • Credit cards
  • Retail accounts like store cards
  • Instalment loans like mortgages, car loans or unsecured loans
  • Some utility bills (check with your provider if they report your payments to Credit Reference Agencies)

Accounts such as Pay As You Go items, health insurance and rolling subscriptions would not count.


How would late payments affect my credit score?

In most cases, late payments are not reported to Credit Reference Agencies until your account is 30 days past due. If you’re late by only a few days, you might be penalised with late fees but your credit score should still be intact. 

Once you pass the 30-day mark, Credit Reference Agencies are often notified and the late payment consequently shows up on your credit reports. 

While a 30-day grace period is considered the typical arrangement, reporting protocols for late payments could vary between lenders so make sure to check the specific terms and conditions in your agreement.


How much can late payments hurt my credit score?

It depends. The impact of a late payment on your credit score can vary depending on factors such as:

How late the payment is – The longer it’s not paid for, the more it’ll bring down your score. 

How recent the late payment is – A recent late payment will have a greater impact on your score compared to an older record from the past.

How frequently you’ve paid late – Multiple late payments can have a compounding effect on your score.


Generally, the better your credit score was before the late payment, the harder it will be hit by a single negative payment behaviour.

Late payments usually stay on your credit report for up to six or seven years, but its negative impact on your credit score fades over time.

How can I improve my payment history?

Don’t worry If you don’t have a perfect payment history right now – anyone can work to improve it with consistency of good payment habits. 

These tips may help:

  • Try to always pay your bills on time
  • Catch up on late payments as soon as possible  
  • Budget enough money to cover your bills
  • Set up payment reminders
  • Set up direct debit 
  • Review your credit reports regularly to make sure your payment behaviour is accurately reported

Need more help? Our team of specialists are available to help you out 7 days a week on WhatsApp and email.


Lauren Robson is the digital communications manager at Portify.
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