Credit score Q&A: “How much does a missed mortgage payment lower your credit score?”
As I always say around here, credit score creators like to keep their algorithms a bit of a secret.
But every now and again, they give us some great little tidbits to demystify the process.
The latest data comes from Fico score provider Fico, who detailed the impact of a missed mortgage payment on your credit score on their company blog.
They used three starting credit scores, including a 680, 720, and 780.
Let’s take a look at what they found:
680 Credit Score
30 days late on mortgage: 600-620 credit score
90 days late on mortgage: 600-620 credit score
720 Credit Score
30 days late on mortgage: 630-650 credit score
90 days late on mortgage: 610-630 credit score
780 Credit Score
30 days late on mortgage: 670-690 credit score
90 days late on mortgage: 650-670 credit score
So what does this tell us?
Well, just like foreclosures and short sales, those with higher credit scores to begin with suffer larger drops than those with lower credit scores.
And the impact of a 30-day mortgage late doesn’t seem to be all that different than a 90-day mortgage late.
This also means it will take that much longer for those with previously good credit scores to recover, while those with average or bad credit scores will be able to get back to where they were much quicker.
Not that being bad or average is a good place to be…