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New Visitor
Posts: 2
Registered: ‎09-25-2007
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Why does your fico score drop so low when you miss a payment?

I recently forgot to pay one of my bills and my fico score dropped by 80 points. I am very upset about this. I worked so hard to fix my credit and increase my score from 525 to 606. I have paid all of my bills on time for the past five years and I miss one payment and my score drops by 80 points. I think this is unfair. Now its going to take even longer to build my score back up, when they dropped it so quickly.
 
There has to be a much more fair penalty than this.
 
What can I do now to bring my score back into the 600's. I already pay my bills on time and am in the process of paying my credit cards in full each month. What else can I do?
 
This situation makes me want to cry after all of the hard work I put in.
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Posts: 6,182
Registered: ‎03-29-2007
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Re: Why does your fico score drop so low when you miss a payment?

GW!
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Posts: 4,596
Registered: ‎09-14-2007
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Re: Why does your fico score drop so low when you miss a payment?

savvy, I feel your pain, because I've been there, done that. There was a time, that I rationalized that "oh, the cc bill is due....I'll pay it tomorrow. tomorrow turned into a week, then I finally "got round to it"....and it cost me dearly. But have faith my friend. When I woke up from the dark cloud of indifference, and started becoming concerned my FICO score was 521(that was in March of this year). After taking deliberate steps of guarenteeing myself NOT to be late, AGAIN on payments, my FICO scores started soaring. It went from 521 in March, to 681 in August! it happened by treating this forum like school. I've learned so much what it takes to rebuild credit, and keep it! You can do the same...pay on time; get those credit card balances to a fraction of your credit limit. You'll come out of it in no time. Apply for a cc with bad credit, KEEP THE PAYMENTS CURRENT. And you will be rewarded, my friend. Good Luck! I now have 8 cc's, call EACH ONE weekly for balances, and double...triple check the due dates, and pay wayyyyy before the due date. Like you've found out, it's soooooo hard to get the credit scores up there and sooooooo easy to have it take a nosedive. I may be paranoid, but this is what it takes for me to get the scores I want. Take the advice of the others on this forum. Work the program and the program will work for you. Make that GW(goodwill letter) a priority for you. You'll be glad you did
"Never ever, ever be late. Never" (FUTR)
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Posts: 3,330
Registered: ‎10-19-2012
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Re: Why does your fico score drop so low when you miss a payment?

I think somehow missing even one payment signals a much higher risk of default. 

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Posts: 19,503
Registered: ‎03-19-2007
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Re: Why does your fico score drop so low when you miss a payment?

FICO scoring is an evaluation of risk of future default on credit obligations within the next two years or so.  It is not an evaluation of overall consumer credit-worthiness, and is just one part of a creditor's evaluation tools.  Creditors may choose, due to its convencience, to rely primarily or solely on a consumer's FICO score in making their determinations, particularly if the amount of credit is small.  However, as the principal or credit limit at risk rises, most creditors will do a more in-depth manual review, both of a consumer's credit report, and other factors, such as overall income, assets, etc.

 

Actual payment history data represents actual consumer default, as opposed to the inferences of default potential used in the other FICO categories.

Payment history is thus rated highest amongst the five FICO scoring categories.

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