Affect of missed payments as they age?

[Cblough93]

So it's pretty well known that as payments age, they have less of an affect.

Do you know if there is a certain point/age that late payments have to hit in order to have little affect? Or is it more of a linear thing where there's no drastic reduction in affect?

for example) let's say late payments affect your score in a exponential way. So once a payment hits 4 years of age, the affect is greatly deminished, giving you a large boost all at once but it still has some affect obviously cause it hasn't completely dropped off yet. 

An example of the linear progression would be: you would gain back a couple points here and there slowly but wouldn't ever see a large change until the missed payment drops off completely. 

[Curious_George2]

I had a recent situation that provided information about this. 

For several years, the only baddie on my file has been a 30D from  2017. It is aging off my reports, so I can see how much it was hurting me. Here’s what happened:

Transunion 

When the 30D dropped off, my F8 score gained 33 points and my mortgage score also gained 33 points.

Experian 

F8 gained 37 points. Mortgage score gained 21 points.

Equifax

F8 gained 34 points. Mortgage score gained 17 points.

[Cblough93]

So in your experience it would still be possible to get 800+ even with a 30 day late

[Thomas_Thumb]

It's possible and been reported on the Forums. An isolated 30 day late does not push a file to a dirty scorecard on Fico 8 or Fico 9.

Again, it's non linear. There are decay curves that bottom out with an offset from zero. Then at 7 years pop goes the weasel. Penalty falls off and score spikes - assuming no remaining lates.

It's been charted. However, decay characteristics are profile sensitive.

[Curious_George2]

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@Cblough93 wrote:

So in your experience it would still be possible to get 800+ even with a 30 day late

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Yes. My F8 scores topped out at around 805-815 with the aged 30D still showing. 

[Thomas_Thumb]

Awesome! That deserves a 🍌

[Cblough93]

What do you guys know about the 10% vs 30% util ratio arguement? 

some say as long as you are under 30% your score won't take a hit, while some say you need to be under 10%

[Thomas_Thumb]

Aggregate utilization and highest card utilization are different metrics. Never generalize or lump them together.

Highest card UT should be under 29% and aggregate under 9%. I don't see any UT related score drops anywhere below these thresholds.  If aggregate reports in double digit territory, score will drop.

Some posters - typically having thin/young files and a revolving account under 12 months age report score drops if aggregate UT exceeds 5% or highest card utilization exceeds 9%. Call them the 9 to 5 crowd.

Under 30% UT is often discussed as a threshold for responsible credit management. That's not the same as no impact on score. Particularly, when referring to aggregate.

The niner's will say keep all card utilizations under 9%. That, by default, will maintain aggregate under 9%. Of course, if too many cards report balances, that can also lower score.

The scoring factors within each scorecard are "tuned" for that specific population segmentation. Don't expect a one size fits all response to utilization. After all, the purpose of scorecards is to differentiate between groups.

[DXness]

https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/HOW-many-points-are-these-late-payments-cost...

There is a chart posted in this^ thread showing an estimate of decay speed and point penalty remaining.  It varies considerably depending on what the worst late you have is.  I'm fairly skeptical of the numbers, though - I can't imagine receiving around 90 points back when my last 120+ day late ages off around Sep-Oct 2026.  EX would rocket from the low 740s to the 830s and I simply can't comprehend having a score in the 830s lol.

[Thomas_Thumb]

I remember when ABCD 1st posted that chart. He collected data from different sources to create some composite curves. The graph doesn't extend to 7 years so not all the decay is captured on the more severe lates. The penalty will drop further at 5-7 years.

A 120 day falling off, if the file is clean afterward, nominally adds 60 points. The gain will vary depending on the file characteristics. A couple days ago CreditCurious reported a 71 points bump when a string including a 150 day late dropped off.