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30, 60, 90 and time equation?

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30, 60, 90 and time equation?

I’ve been doing some research online about how harmful late payments are as they age on your credit. Unfortunately most of the results that come up are basic and just say they can be on your credit for 7 years...which we all know here.

So my question is does anyone have any statistics or know at what point during aging will 30, 60, and 90 day lates impact your score less? For example. If you go 1 year without a single late payment will that provide a substantial boost? Or if you have a stubborn account you couldn’t dispute or GW and are stuck with a 4 or 5 yr old CO that you paid, any idea when they lessen? Or a 5 yr old 90 day late and how that still impacts your score?

Thanks
Message 1 of 6
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Super Contributor

Re: 30, 60, 90 and time equation?

As a general guideline, while all negative items will impact your score for the full time (7 years, typically) that they're present on your CR, the impact will lessen by 1/3 for majors and 2/3 for minors, possibly on or about the 2 year mark.  So, to assign numbers to it for the sake of discussion, let's say that a brand new baddie drops one's score 90 points.  If it's a major, after 2 years perhaps 30 of those points are regained, where the remaining 60 won't come back until the item falls off the CR.  If it's a minor, after 2 years perhaps 60 of those points are regained, where the remaining 30 won't come back until the item falls off the CR.  It's also important to understand that these numbers I'm speaking of above assume the presence of only 1 negative item.  If you're talking multiples, it's a different discussion. 

 

From what I've seen, major or minor, 1 year of time as you asked in your post is not significant in seeing score start to rebound, but rather 2 years seems to be a commonly reported threshold.

Message 2 of 6
Established Member

Re: 30, 60, 90 and time equation?

Understood. How does it change if there are multiple? For example I have 4-5 charge offs that I ended up paying off so they say “paid as agreed” but still the 30, 60, 90 and CO’s reflect. After 2 years they lessen. Will that continue to lessen at let’s say the 5 yr, 6 yr?? Until they are gone.
Message 3 of 6
Regular Contributor

Re: 30, 60, 90 and time equation?

i posted this in the other thread about scorecards.

 

here is what they're looking at in a dirty card. most important to least:

severity of worst delinquincy ever

months since last 30+ days past due

# of inqs in last 12mo

length of credit history

 

for a dirty file, they punish your payment history, which is the most important part of your score.

here's an example of how they do that.

 

# of months since most recent derog?

no derog = 75

0-5mo = 10

6-11mo = 15

12-23mo = 25

24+mo = 55

(these aren't the final fico points, they're temp points for adding up your scorecard)

 

this gives an idea about the timeframe for it to affect the score less.



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Valued Contributor

Re: 30, 60, 90 and time equation?

Message 5 of 6
Regular Contributor

Re: 30, 60, 90 and time equation?

that chart matches up perfectly to the scorecard data i found



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