How Late Payment on Your Mortgage Can Damage Your Credit Score
We all know that late loan payments can lead to a drop in our credit rating. How much he can fall is a little less obvious. This simple chart gives you a general idea of how much late mortgage payments actually affect your bottom line.
On Credit.com, consumer advocate Bob Sullivan explains that the impact of a late mortgage on your FICO rating can be quite unexpected. He cites a statement from the Consumer Financial Protection Bureau that a simple $ 100 payment delay on a line of credit could lead someone to score 780 points to 680 points.
And research on mortgage payments from FICO backs this up. According to FICO:
The FICO study modeled different types of mortgage delinquencies on three representative profiles of consumer credit bureaus, scoring 680, 720, and 780, respectively. I say representative profiles because we focused on consumers whose credit characteristics (eg, usage, overdue history, file age) were typical of the three scores in question.
In its research, FICO found out how these credit ratings are affected by various overdue mortgage payments. They also show how long it will take to recover:
While the FICO says the numbers are meant to be used as benchmarks and not precise measurements, they also say they are ultimately pretty accurate based on their research. Check out their post and Sullivan’s post for more details.
Research Shows How Delayed Mortgages Affect Results | FICO via Credit.com