(credit)Life[scores] is like a box of chocolates. You never know what you'll get

[Anonymous]

I pulled my Experian CR today, complete with their Vantage Score. It showed a 711 !! Yayyyy, I've finally made it to the 700 club. Phew, finally. I was so excited and happy.

I succumbed to the temptation of ordering FICO Credit Complete from myFiCO(the one where you get all 3 cr's). I had a feeling I shouldn't have but I did. This was the very first time I've pulled all 3 at the same time(save the once a year thing with annualcreditreport.com)

11/02/07 FICO scores
TU: 648
EQ: 651
EXP: 642

Was hard to stomach the 69 point difference between the EXP FAKO score of 711 and FICO score of 642. *sigh*

That's the bad news(the scores). The good news is:
1.) My brand new WaMu card with the nice $6,500 cl isn't being reported yet.
2.) The 1 collection, and 1 charge off, have been removed. Gone from all 3 CR's.
3.) Utilization stands at 7%

At the end of the report you can run different scenarios what improves/worsens your score. I did the "Best Action", and it came up with "pay 90%-100% on all revolving debt for the next 24 months, and your score could be 681-721". That's exactly what I'm doing, but I'm thinking of PIF'ing, for a couple of months to see what that does for me. Plus work on GW'ing my lates from years past.

Since I'm home alone tonight, think I'll open up a bottle of white zinfandel and watch re-runs of Women's Murder Club(I've read all of Patterson's books in that series), and celebrate the birth of my new credit life. Sounds like a good idea, doesn't it?

Sorry, I had to vent. I feel better now.

[haulingthescoreup]

Cheer up, Sylvia! Didn't you get the dreaded bucket message a while back? That's probably what you're looking at with the 3 FICO's. Apparently my peers in my new bucket don't do lates, and they don't do inqs, even the very few that I have. So I'm looking quite the hayseed these days.

You've done a lot of the heavy lifting recently --upgraded cards, and removed a collection and CO. Sweet! And now for the GW's for the lates (boy, that sounds familiar...)

I hear you about the PIF'ing. I have decided to let only my mortgage, one student loan, and HELOC report for a 30-day span. I paid off the little student loan, and I'm PIF'ing all five CC's, just to see what happens. (Although I keep thinking about letting $3 on the $30K CL card report, just to see what 1/100 of 1% would do!) When the last CC updates with a $0 balance, I will also spring for the new FICO Credit Complete, and see what's what. I've never gotten all three scores on the same day before!

I would rather have instant results than philosophical patience any old day, but it looks like we're both in the waiting game now. Congrats to you and your shined-up credit! From Tennessee, I'm raising a glass of pinot noir to salute your white zin in Texas. Enjoy your peaceful Friday evening! OMG, no sports tonight on the plasma TV! In fact, no TV period. Can't get much better than that...

[Anonymous]

Be of good courage Sylvia..I know you will be joining those in the 700 club real soon....

[Anonymous]

Thank you my myFiCO friends of kindred spirits, for your kind words.

With friends like you all, and everyone here, why do I even need FICO scores? I'm the wealthiest woman in the world.

(that was a great bottle of white zen, hauling. LOL)

Fondest regards,
Syl

[RobertEG]

Prior history is something that one cannot escape, so dont create any late payment history! Sure, paying down debt is something that we can do monthly, but we cannot erase prior errors of the flesh.

After extensive reading on credit modeling, and feedback I have received from numerous other contacts, here is my approximation of the effect of late payments on credit scores. Take them or leave them, but they are based on extensive data, and exemplify the light hit of 30-day lates, and the hell-hole of 90+-day lates.

30-day late payments:

Around a 15-20 pt or more sure hit when they first occur, dropping to around a 10-15 pt. hit after one year of aging, then to around 5-9 pts after two years of aging, dropping to only a 1-5 pts hit after thee years.  They fade relatively fast in the schema of the scoring algorithms, for they are not yet “dirty” file indicators.

60-day late payments:

Around 35-40 pts immediate hit, dropping to 20-25 after one year, around 15-20 after two years, but only decreasing to around 18 after three years.  They fade slow, but linger on.  Outside of the generic FICO scoring model, 60+ lates also drive most consumers into a new scoring category by most lendors using their own models into a “dirty” credit history bin-bucket.

90+-day late payments: the red flag of the credit industry

High initial hit, compounded upon the prior 60-day late, for a total hit of 50+++ points.  Serious hits.  Warning signs blare in the scoring algorithms. This only drops by around five points after one year, to around 40-50.  Two years out, the hit is still around 38 points.  After four years, still lingering around a 30 point hit.  A 90-day late lingers strongly, and fades at the same rate as the melting of the polar ice caps.  After 6 years, it appears to only recede to around 20, at which point it dissolves and goes away at 7 years.  Few can wait 7 years to recover those points. 

In comparison, a drop in % revolving credit utilization from 50% to 10% will achieve about a 50-60  point FICO increase.  However, one 90-day late wipes all that out, based on the weighting.  Pay on time, pay on time, pay on time!!!

Regardless of the accuracy of my point projections, the bottom line is obvious.

[fused]

As usual I enjoyed reading your post! I will, however, have to disagree with some of your assumptions. A lot will depend on which bucket one was in prior to the new derog being reported. A single 30 day late can lower one's score by more than 100 points but it is true that this late's negative affect fades rather quickly.

Now with a 60 day late it's different. A bigger drop in scores and big negative affect for a full two years.

A 90 date late is a serious derogatory on a credit report and has the same negative affect on scores as a CO, collection, or any public record. If it's less than two years old, it will have a major negative affect on scores. By six years it's just nothing more than a zit on your CRs, once it's removed you might see a small improvement in scores if any.

Message Edited by fused on 11-03-2007 03:53 PM