Not paying several months than paying again scoring?

[Anonymous]

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...

[Thomas_Thumb]

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.

[Anonymous]

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.

[Jnbmom]

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. 

[Anonymous]

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!!!

[Anonymous]

“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!

[iv]

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@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!!!

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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.

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@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!!!!

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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.

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@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.

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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.

[Anonymous]

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...

[Anonymous]

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?

[Appleman]

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...