Many people believe, "I always pay my bills so I have good credit.". This may be a true statement but indicates a flaw in many people's thinking. In reality, PAY HISTORY only accounts for 35% of the FICO credit score.
This amounts to just 297.5 credit scoring points out of a total of 850.0 points. Having perfect pay history will only help a person get started toward a great credit score.
If someone has horrible credit history but does the other things correctly, they may have 552.5 credit scoring points. Doesn't seem right but it is reality. In my book, Financial Folly, I write about this fact and some others by discussing the seven smart financial decisions that will lower the credit score.
It is vital that all consumers learn what makes up the entire 850 credit scoring points, which includes points for pay history. Just keep in mind that the "types of accounts", "activity", "length of history", and "balance ratios" make up 552.0 points.
The whole picture is necessary in order to protect and or increase a credit score.