Typical Situation - Missed One Credit Payment and Seen the Score Drop (Advice?)

[Anonymous]

Hello all,

Exactly a year ago I've pulled my FICO scores for a car loan and got an average of ~750. Got the car loan approved, obviously.

This year my score dropped to 670 because of a late payment, which I've taken care of as soon as I learned. It took place because of oversight and address change, not because of inability.

So I'm in my mid-20s with good income and only one thing that taints my score, but it tainted it pretty badly. Except for that one oversight, I've always paid my bills on time and almost always in full. In terms of credit variety, I have ~6-7 accounts; one car loan, one student loan, and 4 credit cards.

I don't have an immediate desparate need to increase my score through any of the shady means, but in about 2 years I would to recover as I'll be in a position to apply for mortgage loans. So my question is - what can I do tangibly to repair my score so that it doesn't stagnate? Can I go back to 750 in a couple of years with only 6 accounts open and an average age of the credit lines being under 3 years (well, in a couple of years it may be about 5)?

Specifically...

1) Obviously not intending to miss any payments from now on - but will it make a difference from now on?

2) Any ideas on credit card utilization? I.e. my usual practice is to max it within a month (to collect points) and then pay it off in full for that month. I heard from a lot of people that the balance should not go above 30%, however. Is that the carry-over % or is that the max at all times? (since my carryover is usually 0% but intra-month utilization is close to 100%). If it can help my score, I'm willing to forgo points and keep it at 30% at all times, but there's a lot of confusion about it.

3) While there are cards out there that I can apply for, do I need to? I already have 4 with varying maximum levels. Do I need to open new accounts for the score to go up? Problem is - wouldn't opening new accounts decrease my average age of my accounts, and also - wouldn't that cause a lot of "hard" inquiries into my credit score?

4) Anything you can recommend me on monitoring service... MyFico offers a couple - monthly and quarterly, but it's unclear if any of these are REAL FiCO scores.. i.e. ScoreWatch seems to be Equifax whereas FICO Quarterly Monitoring seems to be TU. So the periodical scores that you get from both services aren't real FICO scores? Or is it that you get a real FICO score, but for the actual credit report, you get one from Equifax and TU, respectively? Really confused on these services, but would be wlling to pay for a CLEAR and concise credit report on a regular basis.

So my overall fear is that there are not that many proactive things I can except for "wait and see", which feeds the fear that I'll be at 670 for a while without doing something proactive. While this is not a horrific score by any means, it's still well below the national median and it's extremely discouraging for me to be down after a stupid oversight.

Any advice would be welcomed.. Thank you in advance.

[TravellingNomad]

the TU and EQ scores on myFICO are your FICO scores.  and as far as utilization, from what i've read, the general concensus is have all but one cc reporting balance at 10% or less utilization amount.  you said you pay in full each month.  but what you might want to do is find out when your statement cut-off dates are for your credit cards, and then ask the cc company when each month they report to the CBs.  this way, you know exactly when you'll need to have the balance on your cards paid to zero before the cc company sends your account info to the CBs.  you may be paying the cards in full to zero balance each month, but it might be reporting the balance on your credit report depending on when you pay in full and when the cc company sends your info to your credit report.

about that one missed payment, you can try and see if your lender will do a GW deletion of the late payment. 

[marty56]

The effect of a 30 day late would decay quickly over time.  If you are just interested in FICO score monitoring, Score Wacth is great.  I use True Credit which does not provide FICO score monitoring, or even a FICO score but looks at changes on all 3 reports.

[Anonymous]

---

@TravellingNomad wrote:

about that one missed payment, you can try and see if your lender will do a GW deletion of the late payment. 

---

Can they theoretically do it? I.e. send a notice and remove the late payment?

[Anonymous]

---

@Anonymous wrote:

---

@TravellingNomad wrote:

about that one missed payment, you can try and see if your lender will do a GW deletion of the late payment. 

---

Can they theoretically do it? I.e. send a notice and remove the late payment?

---

Sure, a GW letter is when you say "I've been your customer a long time, it won't happen again, etc" and hope they will remove it....just search the forums for tons of info on how to write a successful GW letter.

But in the next two years, you will recover if you keep doing what you were doing - and of course, for a mortgage, you can explain it (I had one from my AU card, where my mother was late, and I told them that, and it was fine).

As for how to pay a card, just make sure the STATEMENT balance is low, less than 10% - pay it off whenever you want as long as it doesn't report a high value.

And of course, be patient, because the scores are very time dependent, even when we are in a hurry, they won't budge.

A few other things:

Build up a 20% down payment

Pay off any other loans (student loans are excepted, but make sure the payment is really easy in your budget)

Realize that no one's perfect, just get above a 720 and you'll probably be ok!  The more you read around here, the better you'll understand the whole process

[TravellingNomad]

---

@Anonymous wrote:

Can they theoretically do it? I.e. send a notice and remove the late payment?

---

Sure, a GW letter is when you say "I've been your customer a long time, it won't happen again, etc" and hope they will remove it....just search the forums for tons of info on how to write a successful GW letter.

But in the next two years, you will recover if you keep doing what you were doing - and of course, for a mortgage, you can explain it (I had one from my AU card, where my mother was late, and I told them that, and it was fine).

As for how to pay a card, just make sure the STATEMENT balance is low, less than 10% - pay it off whenever you want as long as it doesn't report a high value.

And of course, be patient, because the scores are very time dependent, even when we are in a hurry, they won't budge.

A few other things:

Build up a 20% down payment

Pay off any other loans (student loans are excepted, but make sure the payment is really easy in your budget)

Realize that no one's perfect, just get above a 720 and you'll probably be ok!  The more you read around here, the better you'll understand the whole process

---

+1 on this and what marty56 said.  as long as you've shown good payment history and continue to do so, that one 30 day late will become unimportant as time goes on.  also, creditors have the power to change, update, or even delete the TL on your account.  you just gotta be able to convince them to do your bidding.  being a long time customer with an excellent payment record might convince them.  you just have to give it a try if you want it off your report. 

[Anonymous]

Some good advice here... Definitely appreciated. I called my bank and while they didn't buy into the story that "it was a one-off" time, they gave me a 6 month period where if I diligently paid off my statements, they said they'd remove it.

I never knew that they all could be so flexible - I was under impression that a late payment was like a DUI or something.

Also called my other CC about the payment dates and closing (credit bureau reporting) dates.. Turns out, they were very close to each other, and interestingly the closing date varied. So now I'll make it a point to pay off my statement maybe a week before my payment date.

[MarineVietVet]

---

@Anonymous wrote:

Some good advice here... Definitely appreciated. I called my bank and while they didn't buy into the story that "it was a one-off" time, they gave me a 6 month period where if I diligently paid off my statements, they said they'd remove it.

I never knew that they all could be so flexible - I was under impression that a late payment was like a DUI or something.

Also called my other CC about the payment dates and closing (credit bureau reporting) dates.. Turns out, they were very close to each other, and interestingly the closing date varied. So now I'll make it a point to pay off my statement maybe a week before my payment date.

---

The statement posting dates can vary a day ot two from month to month but by law the due date has to be the same day every month so that helps you to remember things.

But I'm still not sure if you quite understand the best way to manage your utilization. For most cards the balance that reports on your monthly statement is the amount used to calculate utilization for the month. You don't want to leave a large balance to report and then pay in full because that means a higher utilization and thus your scores will suffer.

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month on it's statement and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[LIGHTNIN]

---

@Anonymous wrote:

Some good advice here... Definitely appreciated. I called my bank and while they didn't buy into the story that "it was a one-off" time, they gave me a 6 month period where if I diligently paid off my statements, they said they'd remove it.

I never knew that they all could be so flexible - I was under impression that a late payment was like a DUI or something.

Also called my other CC about the payment dates and closing (credit bureau reporting) dates.. Turns out, they were very close to each other, and interestingly the closing date varied. So now I'll make it a point to pay off my statement maybe a week before my payment date.

---

Welcome to the family here at myFICO, 

So glad to hear that this missed payment will be removed in the near future.

Thank you for your post because you showed others by how much a missed payment can hurt a CS 750-670= 80pts ouch!

Were are all here to help each other 

[TravellingNomad]

---

@Anonymous wrote:

Some good advice here... Definitely appreciated. I called my bank and while they didn't buy into the story that "it was a one-off" time, they gave me a 6 month period where if I diligently paid off my statements, they said they'd remove it.

I never knew that they all could be so flexible - I was under impression that a late payment was like a DUI or something.

Also called my other CC about the payment dates and closing (credit bureau reporting) dates.. Turns out, they were very close to each other, and interestingly the closing date varied. So now I'll make it a point to pay off my statement maybe a week before my payment date.

---

is the lender going to send that in writing?  hoping that they stay true to their word.  but still...it's a move in the right direction.