Late payments

[OptimalFICO]

Do you have difinitive verification that an account balance on a late payment is irrelevant to FICO scoring? It is laid out clearly in his book and he has a lot of insider info regarding such guidance, as well as years of direct experience working with people to improve their scores.

[pizzadude]

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@OptimalFICO wrote:

Do you have difinitive verification that an account balance on a late payment is irrelevant to FICO scoring? It is laid out clearly in his book and he has a lot of insider info regarding such guidance, as well as years of direct experience working with people to improve their scores.

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Yes.   I have never seen a situation where a 30~day late payment did not result in an immediate and severe FICO scoring ding, even in cases where someone forgot a residual small interest payment, like $5.

Since FICO is a measure of your ability to repay debt as agreed it makes sense that the amount of the late payment is disregarded.

The only move towards this that I am aware of is the FICO08 scoring model which appears to ignore "nuisance" collection accounts under $100.

[OptimalFICO]

As you know the FICO algorithm is proprietary and very complex. I don't discount your claim, but Mr. Bingham has been actively involved in the industry for years and has a great deal of insider contacts, knowledge and experience so I wouldn't discount his claim either. Of course the best bet is to never be late with payments in the first place :-)

[pizzadude]

I agree that making payments on time is the best approach 

I certainly don't claim to understand the inner workings of the FICO scoring engine, and really all that anyone can do is make assumptions based on what we see happening and what people report.    All I can say is that I've never seen anyone squeak by without a significant FICO score ding when they have had a recent late payment reported.