topic Re: Time lapsed since derogs in Understanding FICO® Scoring

Time lapsed since derogs

krielly — Wed, 23 Jun 2010 16:34:55 GMT

I know that derogs and public records are said to have less of an impact on your score the more time passes.

My question is this.. Is this a yearly thing. Do they actually have less of an impact specific yearly marks??

Thanks in advance.

Re: Time lapsed since derogs

fused — Wed, 23 Jun 2010 16:48:07 GMT

All I can say is after "2" years, serious derogs have less of an impact on FICO scores. After that, its a guessing game for just about everyone. FICO scoring has a TON of moving parts.

Re: Time lapsed since derogs

RobertEG — Wed, 23 Jun 2010 17:57:48 GMT

I agree with fused. FICO is a proprietary scoring algorithm, and details of its inner workings are, for obvious reasons, not published.

All remain, in some fashion, for up to 7 years.

All we can really go upon are anecdotal experiences.

We only have a few specific, factual statements from Fair Isaac.

FICO scoring is primarily an attempt to rate your risk of becoming delinquent within the next two years. When any projections, including those made by the Fair Isaac gurus, stretch beyond two years, they begin to enter the realm of psychic prediction rather than scientific analysis.

From my experiences, and what I have seen reported on this site over the years, this is my subjective opinion on the effect of derogs.

Everyone wants numbers, so here is my opinion.

When you first go 30-days late, the initial FICO hit seems to be around 20 points. It seems to then decay at a linear rate of appox. 1/2 point a month. This is a minor derog. After 3-4 years, it has little remaining effect.

When you first go 60-days late, the intial FICO hit seems to rise to around 30 points. This is the first of the major derogs.

60 day lates, from my experience, also seems to decay at about 1/2 point a month. But many on here have reported that after two years, the effect of 60-day lates becomes the same as a 30-day late, so at 2 years, is probably hitting you for around 14 points, then continuing to decay at approx 1/2 point a month.

When you go 90+-days late, you are in the realm of serious major derogs. Probably an intitial hit of around 40 points, and then decaying, linearly, at around 1/2 point a month, up to their termination at 7 years.

Collections, charge-offs, and public records, also being major derogs, seem to decay at about the same rate.

But, as fused has said, it becomes very complicated. Depending upon your scoring bucket (which algorithm FICO assigns you to), the weigthing of payment history can vary markedly. For example, one with a credit history of 20 years is scored, with otherwise identical derogs, different than one with only a one year credit history.

This may confuse more than help, but one thing is certain, at least to me. Any derog has substantial short-term effect, and the decay of their effect is probably less than one point a month as they age. No magic numbers.

What may have more significance in your CR when a creditor views it is the status of the derog debt. FICO, being a predictor of the likelihood of missing debt payment, does not score old derogs any differently whether paid or unpaid. A prior missed payment is still a prior derog. But a potential creditor will frown deepily on an unpaid debt. It is not all just about FICO.

My opinions only.

Re: Time lapsed since derogs

1gr8deal — Thu, 24 Jun 2010 21:12:56 GMT

Does the " last reported date" have an effect on the time lapsed since derogatory? In other words if an account is disputed and verified when the CRA changes the "last reported date" will that make the derogatory item score as more recent than it was before the dispute?

Re: Time lapsed since derogs

fused — Thu, 24 Jun 2010 22:18:46 GMT

@1gr8deal wrote:

Does the " last reported date" have an effect on the time lapsed since derogatory? In other words if an account is disputed and verified when the CRA changes the "last reported date" will that make the derogatory item score as more recent than it was before the dispute?

Yes, it will with Equifax.

Re: Time lapsed since derogs

Anonymous — Fri, 25 Jun 2010 01:10:39 GMT

I have 4, almost six year old medical collections that I will never ever pay. They have not reported anything new in over 4 years, but there they sit.

My score with Transunion has not moved a single point in over a year, while scores from both other agencies fluctuate up and down, and are both almost 100 points higher than TU.

MY TU score has been 683 every single time I have checked it, (735 to 774 on the other agencies) and I check alot. It had not moved from 683..not a point.

My available credit has gotten to about 55% - it was about 75% but I had a card close on me for inavtivity back when the credit card companies were shedding people left and right. That one card had a big limit on it, and was just there in case of medical emergencies. Killing it made my usage look high.

I have 1 inquiry and a good mix of accounts. If anyone ever told me that time makes a difference I would beg to differ.

I have never had a late pay on any account, just those 4 medical collections that I would think mean nothing by now.

I think that these are all scams anymore and they get money from suckers anyway they can. With all of the super secret models, and talk of just paying on time etc etc is bogus crud in my opinion.

I don't need any credit thank goodness, have a house and cars and such, but if I did, I would have to hope that TU would be tossed in the trash and the other scores used to evaluate me.

Re: Time lapsed since derogs

1gr8deal — Fri, 25 Jun 2010 01:55:54 GMT

That appears to be a punishment from EQ for daring to dispute anything with them. Seems to me that the FCRA should have something to say about that as there is nothing FAIR about using that changed date to determine your score.

Re: Time lapsed since derogs

fused — Fri, 25 Jun 2010 02:13:03 GMT

@Anonymous wrote:

I have 4, almost six year old medical collections that I will never ever pay. They have not reported anything new in over 4 years, but there they sit.

My score with Transunion has not moved a single point in over a year, while scores from both other agencies fluctuate up and down, and are both almost 100 points higher than TU.

MY TU score has been 683 every single time I have checked it, (735 to 774 on the other agencies) and I check alot. It had not moved from 683..not a point.

My available credit has gotten to about 55% - it was about 75% but I had a card close on me for inavtivity back when the credit card companies were shedding people left and right. That one card had a big limit on it, and was just there in case of medical emergencies. Killing it made my usage look high.

I have 1 inquiry and a good mix of accounts. If anyone ever told me that time makes a difference I would beg to differ.

I have never had a late pay on any account, just those 4 medical collections that I would think mean nothing by now.

I think that these are all scams anymore and they get money from suckers anyway they can. With all of the super secret models, and talk of just paying on time etc etc is bogus crud in my opinion.

I don't need any credit thank goodness, have a house and cars and such, but if I did, I would have to hope that TU would be tossed in the trash and the other scores used to evaluate me.

Where did you get your scores from? Which site?

Re: Time lapsed since derogs

fused — Fri, 25 Jun 2010 19:32:56 GMT

@1gr8deal wrote:

That appears to be a punishment from EQ for daring to dispute anything with them. Seems to me that the FCRA should have something to say about that as there is nothing FAIR about using that changed date to determine your score.

I agree 100%!!!!!!!!!! There might be problems with all of this. I don't think FICO has anything to do with the FCRA.

Re: Time lapsed since derogs

1gr8deal — Fri, 25 Jun 2010 05:22:53 GMT

So I submitted a complaint to the FTC and I hope that all others who read this will also. I for one am so tired of being bullied by this company.

Re: Time lapsed since derogs

BungalowMo — Fri, 25 Jun 2010 18:47:00 GMT

I totally agree! While I haven't disputed anything with them in a long time, for whatever reason, my score barely moves on that report. EQ & TU have nearly identical info (except the # of inq...TU has more and they're more recent) TU is mid 700's & EQ is draggin' tail at 686 & only fluctuates within 2 or 3 pts over the last 6 mos.

Jeez...and I thought I hated EX!

Re: Time lapsed since derogs

RobertEG — Fri, 25 Jun 2010 22:48:59 GMT

I dont see how the CRAs are the target of your complaints.

I know that it is quite often said that prior reporting of DOLAs on an account, such as dispute dates, dates of partial payments, dates of reporting of a CO or CA, etc., somehow act to reset the impact of derogs on the account when it comes to FICO scoring. I have no objective information to support or contest this assertion. Some have offered anecdotal experiences that seem to confirm this. And that is about the best you can probably get…. anecdotal experiences. Whether true or not, I don’t see that it leads to any FCRA violations.

FICO has never, to my knowledge, made any specific statements about the inner workings of their scoring algorithms when it comes to the aging affect of prior derogs., either with or without DOLA account updates.

The FCRA regulates credit reporting, and not credit scoring per se, except for two matters.

First are the provisions of FCRA 605(a) and (c), which specify so-called “drop off dates,” after which a prior derog with an OC or debt collector can no longer be included in your credit report, and thus your credit score. It is an all or nothing requirement on the CRAs under the FCRA. Your date of any actual delinquency cannot be reset, nor can your DOFD. That is clear, and objective. The FCRA does not specify how scoring is done on any derogs while still legally in your CR. It speciries 7 year drop off for monthly OC account delinquences from their date of occurence, and 7 1/2 year drop off for COs and CAs once 7 1/2 yers has expired from the DOFD on the OC account. No DOLAs can reset these dates.
Second, the FCRA does regulate, under FCRA 609(f), your entitlement to receive credit scores under various conditions, but it does not regulate how they are produced.

I am not sure what would be the basis for a complaint with the FTC against a CRA for any administrative or legal violation of the FCRA, based on the impact of their legitimate entries on your credit score.

The creditors can legitimately report activities on their accounts, including intitial derogs and changes in account status due to various activities commonly referred to as DOLAs and account status update codes. Once reported, the CRAs are obligated to record them in your credit file. Once recorded, then FICO decides how to score them. That scoring is not regulated by the FCRA. How they score is protected under federal trade secret law. Little chance in getting that changed, unless a major overhaul of federal intellectual property laws is first enacted.

The FTC currently has no jurisdiction over FICO credit scoring. I don’t think your evil nemesis is the CRAs, unless you can show that their handling of their recordation of what is reported to them violated some provision of the FCRA. I don’t think the FTC will choose to take any action against the CRAs,