topic Re: Not paying several months than paying again scoring? in General Credit Topics

Not paying several months than paying again scoring?

Anonymous — Sat, 25 Aug 2018 21:16:56 GMT

Just curious what happens if you have excellent scores, 750 and above, then you go 4,5 or even 6 months without paying and then pick up again as if nothing happened. I know 90 days seems to be the magic number when your scores drop like an anvil, but how long before it kicks back....if EVER?

It kind of sucks that you can pay for decades and never ONCE be late in your entire life, but then something comes up where you have to go a few months without paying and then you go right back to paying again, but from a scoring standpoint, it’s as if Armageddon had started...

Re: Not paying several months than paying again scoring?

Thomas_Thumb — Sat, 25 Aug 2018 21:32:40 GMT

If the "no payments" means accumulating lates your score will drop from 750 to below 600 - perhaps 550. The amount of drop will be influenced by credit utilization as well. Note: you run the risk of accounts being closed and going into collection after 120 or 150 days.

Potentially scores will return after seven years if there are no subsequent lates/derogatories. The rebound will be affected by the accounts on file.

Re: Not paying several months than paying again scoring?

Anonymous — Sat, 25 Aug 2018 21:37:55 GMT

I often go without paying on a card for many months, but that is because I don't have a balance. So the issue is not going without paying but how long you can be late on a required payment.

You ask what would happen if you were late 4, 5, or 6 and then pick up again. It's likely that you wouldn't have an option. Your card might well be closed by then by the issuer.

You also ask if your credit score could ever recover from the scoring impact of late payments. Assuming that that the account wasn't closed (and all you had was serious lates) then the answer is Yes and specifically 7 years. Lates are required to fall off your reports no later than seven years after they occur.

Remember that a late payment on a credit card means that the person is so over his head with financial problems that he cannot even make the (small) minimum payment. The MP was due typically 25 days after the statement printed and it cannot be reported as late until you have failed to make the payment for 30 days after the due date. So a Day 30 late really is rightly viewed by FICO as a significant event signaling substantial risk (55 days after you were given the bill, longer if you count the date of a purchase). Day 60 is more serious still, and Day 90 very serious.

Re: Not paying several months than paying again scoring?

Jnbmom — Sat, 25 Aug 2018 21:37:23 GMT

If you even let several cards only go 30 days late your FICO will take a major hit and it will take years to recover.

Re: Not paying several months than paying again scoring?

Anonymous — Sun, 26 Aug 2018 01:57:07 GMT

Well they stuck it up my butt very far, but I also understand why, because I recently took a crap load of new credit (3 personal loans) as well as maxed all my cards, which had already maxed my utilization. Then I Immediately followed it all up by 90 days no payments and counting..

Went from mid 700s to 300-350 I believe homeless people have better credit!!!

Wasn't my plan of course, but believe it or not Armageddon fell out of the sky on me personally. Almost as if it was pre-ordained. Something happened that was totally unforseeable and unpredictable and a close relative who had access to my accounts, cleaned me out across the board and disappeared to the broadway hit tune of about 175k. No I’m not suicidal...yet! But you could say my Christian faith is definitely being tested!!! LOL.

I still say it sucks because anybody who goes a few months and then turns around and starts paying again should be a major indication that this man has every intention of paying the money back. Having to wait 7 full years as if I didn’t make any payments and defaulted and stuck it to them, should not or ever be in the same basket as a man who skipped a few months and then picked up and started all over again!!!!

In the grand scheme of things, if you sit back and look at a guy who went 30 straight years of never ONCE being late, then skipped a few months, then went another 20 years, for goodness sake‘s, on any mathematical graph it would be almost indistinguishable.

So to be graded as the same guy who stole the money and skipped town, well that’s above my pay grade. But I would think 18 months or so should be sufficient to show he’s back on course!!!

Re: Not paying several months than paying again scoring?

Anonymous — Sun, 26 Aug 2018 05:37:11 GMT

“I often go without paying on a card for many months, but that is because I don't have a balance. So the issue is not going without paying but how long you can be late on a required payment”

Creditguyindixie, I know you to be one of the most knowledgeable, if not THE most knowledgeable person on this forum. So I can only speculate that maybe you said that for clarification? To dot i’s and cross the t’s?

Because I’m guite sure everybody knew I had a balance and didn’t pay, NOT that I was not paying because I had a zero balance, which of course, wouldn’t have been any reason to start a thread about the negative impact of late payments on your score, because if you don’t have a balance and don’t make a payment, that’s not “ late”. LOL

But the issue is NOT about how long I can go without making a payment, it’s how long do late payments affect the scoring system , if you have to wait the full 7 years, or if the scores starts to rise sooner than that.

I had already researched that 30 days will only last about a year or so and then your score would start to go back to normal. But that 90 days was the big no-no and when that happens your score won’t rise again until it drops off!

Re: Not paying several months than paying again scoring?

iv — Sun, 26 Aug 2018 05:27:06 GMT

@Anonymous wrote:
Well they stuck it up my butt very far, but I also understand why, because I recently took a crap load of new credit (3 personal loans) as well as maxed all my cards, which had already maxed my utilization. Then I Immediately followed it all up by 90 days no payments and counting..

Went from mid 700s to 300-350 I believe homeless people have better credit!!!

If taking on several personal loans, maxing all cards, and then immediately paying nothing for 90+ days wasn't enough to completely tank a score, what would be???

Considering that the designed point of a FICO score is "odds of 90+ day default"... it's doing its job correctly here.

@Anonymous wrote:
I still say it sucks because anybody who goes a few months and then turns around and starts paying again should be a major indication that this man has every intention of paying the money back. Having to wait 7 full years as if I didn’t make any payments and defaulted and stuck it to them, should not or ever be in the same basket as a man who skipped a few months and then picked up and started all over again!!!!

Sorry, but no. You are in default. Not paying even the minimum monthly payment is default.

Restarting monthly payments at some later point "as if nothing happened" isn't a "major indication ... of paying the money back" - it's the minimum basic expectation. Not to mention the accumulated missed payments, interest, fees... You can't just start regular monthly minimum payments back up again and expect everything to revert back to normal.

@Anonymous wrote:
In the grand scheme of things, if you sit back and look at a guy who went 30 straight years of never ONCE being late, then skipped a few months, then went another 20 years, for goodness sake‘s, on any mathematical graph it would be almost indistinguishable.

In the great tradition of bad car analogies:

You've gone 30 straight years of never exceeding the speed limit, then you flew by a state trooper at 130MPH.

Slowing back down to the limit once the lights and siren go on isn't going to prevent the ticket (or worse).

How long the ticket (and the 90+ lates) count against you is controlled by law - state specific for the ticket, and federal for the lates - you may think 7 years is way too long, and 18 months is "just right". But lenders likely think 7 years is a bit too short! (And 18 months is barely a blink in credit terms.)

Also, to stretch the car analogy a bit further - even after the points from the ticket are gone, that trooper may remember you none too fondly - just as the lenders that you are in default to will have internal records on this even after the 7 year CRA exclusion window.

Re: Not paying several months than paying again scoring?

Anonymous — Sun, 26 Aug 2018 06:04:29 GMT

LMAO! I loved the car analogy IV. I have to use that one in the future, but I’m going to claim credit for inventing it

Well I didn’t immediately stop making payments, actually I made 4 payments for four straight months and then my world collapsed. And even though I understand the basic logic to your reply, I still disagree on one point and one point only. But its a DOOZY of a point.

Because either way you slice it, it is absolutely NOT the same thing to go what I am predicting to be 120-150 days late before I start again and then COMPLETELY pay back the ENTIRE balances plus all interest and penalties, as the guy who decided to just default and take off to Mexico!!!

And if you think that’s fair, then I would have to wholeheartedly disagree with you! And to be clear, I have not as you implied “DEFAULTED”, I am in fact presently in default, and there is a huge difference. When I start paying again and get everything current, I no longer will be in “default”

I don’t think you’re looking at this clearly, because I promise you, if you were the individual who lent me the money? And you don’t think I’m any better, or you’re any better off, by me paying you back a few months late in FULL, than the guy who never paid you at all????

Well let’s just say I would love for you to lend me money

So I think the more proper car analogy is comparing me to having ONE speeding ticket, to the guy who is going to get a dozen more speeding tickets because he continues to speed and I don’t. In which case his drivers license will be in much worse shape and his insurance will cost much more. With that in mind, my score should reflect better for me and not get worse as the guy who keeps on speeding...

Re: Not paying several months than paying again scoring?

Anonymous — Sun, 26 Aug 2018 11:40:19 GMT

Did you get SafeLine (or something similar?) Was that not an option?

If what happened to you was fraud or theft, will your creditors forgive your lates if you can provide proof a crime was committed?.

I mean, I know it's a long shot, but maybe it's worth a try?

Re: Not paying several months than paying again scoring?

Appleman — Sun, 26 Aug 2018 17:11:36 GMT

Sorry OP that you are in your current situation.

It may be best to contact an attorney who specilaizes in financial issues. They can provide you with the best legal options be it going after the person that borrowed(?) your money or if bankruptcy might be the better option. I would imgaine there would not be a discharge but there may be help.

At least be worth a consultation...

Re: Not paying several months than paying again scoring?

Anonymous — Sun, 26 Aug 2018 18:11:23 GMT

@Anonymous wrote:

I had already researched that 30 days will only last about a year or so and then your score would start to go back to normal. But that 90 days was the big no-no and when that happens your score won’t rise again until it drops off!

This is not entirely true. The damaging impact of a 30-day late does not vanish after 1-year. That's the timeline for the damaging effect of an inquiry.

People here have conjectured that the damaging effect of a few 30-day lates begins to be softened after 24 months inside the FICO 8 model. That's softened but not eliminated. There's a lot of good reason to believe that conjecture. It probably gets softened further later still (e.g. 4 years, etc.) -- assuming the person has been a good scout for 4 years.

The older FICO models (including the ones used for mortgages) are far less "forgiving" and the Day 30 late appears not to be softened substantially until it leaves the report. Note that waiting for 7 years is not the only such strategy -- there are other strategies for removing the derog earlier.

Re: Not paying several months than paying again scoring?

SouthJamaica — Sun, 26 Aug 2018 23:35:31 GMT

@Anonymous wrote:
Just curious what happens if you have excellent scores, 750 and above, then you go 4,5 or even 6 months without paying and then pick up again as if nothing happened. I know 90 days seems to be the magic number when your scores drop like an anvil, but how long before it kicks back....if EVER?

It kind of sucks that you can pay for decades and never ONCE be late in your entire life, but then something comes up where you have to go a few months without paying and then you go right back to paying again, but from a scoring standpoint, it’s as if Armageddon had started...

What happens is your scores are wrecked and stay wrecked for years.

Re: Not paying several months than paying again scoring?

iv — Mon, 27 Aug 2018 03:31:28 GMT

@Anonymous wrote:
LMAO! I loved the car analogy IV. I have to use that one in the future, but I’m going to claim credit for inventing it

Take it! (Please! I certainly don't want any credit/blame for bad car analogies!)

@Anonymous wrote:

Because either way you slice it, it is absolutely NOT the same thing to go what I am predicting to be 120-150 days late before I start again and then COMPLETELY pay back the ENTIRE balances plus all interest and penalties, as the guy who decided to just default and take off to Mexico!!!

Thing is, though... from the lenders' point of view it IS absolutely the same thing.

By 90 days, and certainly by 120-150 days, they're already assuming that your accounts are a total loss. Just like that runner to Mexico!

And even if you do end up paying the whole thing off, penalties included...

@Anonymous wrote:

And if you think that’s fair, then I would have to wholeheartedly disagree with you! And to be clear, I have not as you implied “DEFAULTED”, I am in fact presently in default, and there is a huge difference. When I start paying again and get everything current, I no longer will be in “default”

...it won't probably won't be to the original lender.

Because by that point you have defaulted. They will have started collections, tried garnishments, marked the accounts as write-offs...

...and probably sold off the bad debt to a collection agency at pennies on the dollar. They aren't waiting around knowing that you plan to pay them later.

If/when you pay off the remaining debt, it'll be to the collection agency (who will be VERY happy to collect the whole amount, plus fees from you - for a huge profit on their investment), but the original lender(s) will still have taken the loss.

@Anonymous wrote:

So I think the more proper car analogy is comparing me to having ONE speeding ticket, to the guy who is going to get a dozen more speeding tickets because he continues to speed and I don’t. In which case his drivers license will be in much worse shape and his insurance will cost much more. With that in mind, my score should reflect better for me and not get worse as the guy who keeps on speeding...

Except that each additional 30 days late (per account!) is basically those additional tickets. And each one (30-60-90-120-150) is, metaphorically speaking, breaking the speed limit by more each time. Eventually, your license gets revoked and you get banned from driving.

Getting a single 30-day late is the "ONE ticket" scenario - your 120-150 day estimate is repeatedly treating a 25mph school zone like the Indy 500. (ie: say goodbye to your license for quite some time.)

...ok, forget the car analogies. For your actual issue - have you communicated with your lenders, told them plainly what's going on?

If you can setup some sort of very minimal continuing payment plan, with a timeline for the full repayment, they MIGHT keep your accounts in-house and not sell them off. That way, you'd at least avoid the EXTRA negative items that would kick in with the collections accounts showing up on your reports, and you have a chance (if a small one) of them doing a goodwill removal of some or all of the lates at some point after your full repayment.

Not talking to them at all will let them assume that you've just pulled a "bust out", and they'll never hear from you (or get a dime) again...

Re: Not paying several months than paying again scoring?

Anonymous — Mon, 27 Aug 2018 05:53:28 GMT

This is ALL hypothetical IV, reality my bags are packed, one-way flight to Mexico! LOL. I have to admit you do keep me chuckling (even if it wasn’t your intended purpose) specially when you said “ OK forget the car analogies” LMAO! I think about the time you said that, in my mind as I was reading, I had just come to the conclusion that I am now more confused with the analogies, than without...

Truth is, as far as I know, by emails, they would be glad to come up with a new arrangement. But I say by email because I haven’t answered even ONE out of 50 phone calls per day for the last few months.. no reason to go there because nothing is going to be achieved.

Wasn’t like I’m looking at a calendar and I could give them an exact date when payments will pick back up so it would’ve just been speculation, “we hate you” kind of talk, so I haven’t bothered.

But based on emails I am sure that every single one of these people would be more than glad if I contacted them and got on a new schedule with much lower payments.

But those calls and attempts cannot be made quite yet, getting close, as I still need a little more time to figure out when that’s going to happen.

It’s not like I don’t have income, but I need a full gallon of milk before I start pouring other peoples glasses! I guess we could call this the milkman analogy, and I guess the milk man drives a truck, so we’re still in the ballpark of car analogies!

But yeah I’m positive that after 90 days, which I think is right around the corner, if not already there, I’m not keeping track, is when nobody’s going to care much longer and throw it off to a collection agency! But until I have some firm dates and figure out this complicated situation I’m in, there’s just no need talking right now.

But during this lapse, I am accumulating a new slush fund which I must do to take care of food on the table for us all FIRST! So the time is rapidly approaching and I just hope they can wait a little longer for me to commence.

I’m not too concerned about any of them to be honest, except one. SoFi. I absolutely adore this company and I think they’re great. I have written them a couple internal messages. Not only do I owe them the most amount of money by far, I mean a huge amount, but they are also the ones that have left me alone which I just think is awesome!!!

But as I say I am not answering the phones, so it’s possible they could’ve started making a couple calls to me.. and I delete the voicemails before I even listen to them as I can already guess the rhetoric pretty much verbatim.

But I feel so absolutely guilty about not paying SoFi, they are the ones that make me toss and turn. The other companies who stick it to you with high rates and crap like that can wait. Yes, I know, part of the reason is because of people lik me who default, but my point is they never cut me too much slack. Or better said, they were not exactly looking out for my best interest......rate

SoFi on the other hand took care of me and, well, as I say, I feel real guilty not paying them. They are going to be FIRST come payday and I can’t tell you how bad I feel because of how much I love that company. They gave me a HUGE personal loan, that a family member is presently enjoying, with minimal effort on my end. In fact I did a write up about them here on the site I was so impressed.

Anyway thanks for the replies everyone and keep in mind I’m not looking for any advice about which way to head, and I do NOT mean that in a negative way. I just mean to say I was only trying to find out if I had to wait a full 7 years or if maybe two or three years down the road the scores would start to increase without having to wait for that long!

Re: Not paying several months than paying again scoring?

Anonymous — Mon, 27 Aug 2018 17:20:16 GMT

@Anonymous wrote:

Anyway thanks for the replies everyone and keep in mind I’m not looking for any advice about which way to head, and I do NOT mean that in a negative way. I just mean to say I was only trying to find out if I had to wait a full 7 years or if maybe two or three years down the road the scores would start to increase without having to wait for that long!

Hey buddy. As I mentioned earlier, there are are strategies you can explore that would not involve waiting for a full 7 years. These strategies involve the creditor being willing to delete all the lates.

The strategies would mesh well with what your proposed overarching strategy is, which is to get back on the horse before Day 120 and begin making regular payments with (I presume) the goal of entirely paying all your debt off, and after that creating a history of perfect payments on all accounts.

Once you have been making perfect payments on all accounts for 25 months and all your CC debt has been paid down to 1% (for 7 consecutive months) I'd explore the Goodwill Letter Saturation Technique.

Re: Not paying several months than paying again scoring?

Thomas_Thumb — Mon, 27 Aug 2018 21:35:17 GMT

Refer to the below link for a prime example of impact associated with going 90 days late on 7 of 7 accounts. Score 600 => 460.

https://ficoforums.myfico.com/t5/General-Credit-Topics/On-the-road-from-a-460/m-p/5340425#M265505