A question about baddies

[vicky3vicky]

Okay, by reading here I know that most baddies stay on your credit report for 7 years and that chapter 7 stays on for 10 years. it also seems that a 30  day late does not cause nearly the damage, timewise, as the 'baddest" baddies. I know those will negatively effect for the duration. I have also heard that the farther from the offense, the less damage. I have no idea when, and how much the impact of the "baddest" baddies will keep causing large differences. I figured time must make SOME difference, or people could be going from a score in the early 600s' up to 800 in the one day the "baddest" baddies aged off. Can someone please clarify?

[donkort]

From my experience, something like a 30-day late payment usually has less effect about a year down the road (i.e., after the first 30-day late), provided that you pay on time from here on in.

Something like a foreclosure will have a great impact for probably at least few years.  

A bankruptcy:  it seems to depend upon how much knowledge one has about "secured credit cards."  It seems as if people who are able to obtain "secure credit cards" after the "discharge" of the bankruptcy (especially Chapter 7), often obtain pretty decent credit within a couple of years.  

As far as collection debt and "charge offs" are concerned, one has to be careful with these.  There's always the possibility that the "DOFD" (date of first debt or something like that) will change to a later date, thereby lengthening the time it is on a credit report.  There are people here at MyFICO who are much more knowledgeable than I am at providing ways in which the collector or the "charge-off" debtor will not create a DOFD at a later date.  

As far as paying collections and charge-offs are concerned, people at MyFICO often advise people to write a "good will" (GW) letter, or to bargain with the collection agency/charge-off people for a "PFD" (paying off collections or charge-offs in exchange for deletion from a credit report).

The impact of collections and charge-offs lessen gradually----but not as much as something like a 30-day late.

I am fortunate that I made my credit mistakes in the 80s and 90s.  I defaulted on loans and had my checks garnished then.  But I made less serious mistakes more recently, getting into credit card debt while paying the minimum payment. 

I am sure there will be people more knowledgeable than I am who will give excellent answers to you.

[FireMedic1]

BK will always over rule all other baddies. Yes 30 day lates lose their sting in a couple years. But it still affects it a small amount. Now 60 day lates hurt more in the beginning and lessen over time. Then comes the 90 to 120 day lates. There's the ding that last the entire 7 yrs. The longer the late. The longer it will affect the scores. Hitting 800 with a clean file. People with old open accounts for a long time and AAoA's up there for years helps a lot too. Older thick files are much easier to get there than young thin files. Just having lates fall off. It all depends what the file has on its own to support hitting the magic land.

[VanderSnoot]

I had four accounts with 90-120 day delinquencies (no charge offs, no bankruptcy). At the end of 7 years, my scores went up 50-60 points. I expect a few more points as inquiries and new accounts age, so if you go into the garden for those last two years, you can expect 60-80 points when the final 90-120 day delinquency ages off.

[FlaDude]

---

@FireMedic1 wrote:

Yes 30 day lates lose their sting in a couple years. But it still affects it a small amount. 

---

I've got a 30 day about 6 1/2 years old that only reports on EX and EQ. Both of those FICO 8 scores are around 20 points lower than TU, and as far as I can tell that's the only difference other than inquiries, which I have more of TU than the others. I'll know for sure when it drops off EQ and EX.

[FireMedic1]

---

@FlaDude wrote:

---

@FireMedic1 wrote:

Yes 30 day lates lose their sting in a couple years. But it still affects it a small amount. 

---

I've got a 30 day about 6 1/2 years old that only reports on EX and EQ. Both of those FICO 8 scores are around 20 points lower than TU, and as far as I can tell that's the only difference other than inquiries, which I have more of TU than the others. I'll know for sure when it drops off EQ and EX.

---

Same boat. Come on June!

[vicky3vicky]

I think I did not clarify my question. Maybe I should give an example. Say, someone has a "bad" baddie. I kNOW it's going to be causing problems until it is gone. But, lets say a paid collection [from a company that does not listen to goodwill letter, ever] After a year will you get a couple points back. A year later, another 2 or 3 points, until the end of 7 years where you would get back the remaining points. Is that how it works?

[Revelate]

No there are specific breakpoints generally and then you will flatline in your scorecard for a while (years)

A 30D or any delinquency is marked as recent for at least two years even under FICO 8. I did see a shift in the reason code order though at 1 year so there is some small aging at least at that point.

For collections / BK / similar I think there is one breakpoint only that is one of the derogatory scorecard segmenters. I don’t know what this age is, probably around 4-5 years TBH though I know this varies by generation of algorithm as I saw distinctly different behavior between FICO 8 and FICO 04 when I got a second tax lien attached to my file. There might be some small aging factor of it inside the scorecard but I stayed so horribly flat for years that I have a hard time thinking there is much. Possible I maxed out that ugly scorecard and there are internal buffers like we see with the 850 scores, maybe, but I am not convinced on that point.

I don’t think we really have had anyone with a mature file concretely track a BK or collection over the entire 7 or 10 years honestly and BK’s that is almost impossible really because all those accounts get closed and you have to rebuild from there which generates it’s own score increase with the newly positive tradelines over the next two years or whatever. Just hard to say

[vicky3vicky]

Now i am wishing I hadn't sold everything I own to pay off that collection. I have seen how the people doing chapter 7 are getting 700 scores at 2 years. I wish I had done that instead.