Average number of points for late payments and paid off accounts?

[mx6bfast]

I've done some Google searches and searches on here but can't find any info. On average, how many points are deducted from your FICO score for a 30 day late payment? If you have 2 or more for one account does the number exponentially increase? Also my wife is going to pay off 2 student loans in the next month. What is the average points that her score should rise per loan, if any?

[MattH]

---

@mx6bfast wrote:
I've done some Google searches and searches on here but can't find any info. On average, how many points are deducted from your FICO score for a 30 day late payment? If you have 2 or more for one account does the number exponentially increase? Also my wife is going to pay off 2 student loans in the next month. What is the average points that her score should rise per loan, if any?

---

There is no universal answer, because it depends what the rest of a person's file looks like. A person who currently has a clean file, long history, 800-plus FICO score, etc., might drop more than 100 points from a single baddie, whereas a person who already has a spotty record might see a modest drop from one new baddie. Think it through: suppose you are a schoolteacher and on the same day you hear about two students acting up, one a studetns who has never been the slightest problem and one who has often been a troublemaker. How will this news affect your opinion of each student? FICO scores are statistical predictions rather than opinions, but the same principle applies: the impact of a baddie depends on whether that baddie is or is not typical of the person's previous behavior.

The best way to get an idea how these sorts of things will affect YOUR situation is to pull your report on myfico.com and then use the Score Simulator to play around with scenarios.

[Anonymous]

FICO scores are predictive tools for lenders that are supposed to indicate the chance that you are seriously delinquint (over 60 days) or default on a loan over the next 2 years. As such, an 800 score indicates a 1% risk of default and if you have a 30 day late suddenly you look like you are in financial trouble and your score will drop your risk up to 5% or up 500%. If you have lates semi-frequently, an additional one will not increase your risk much beyond what it already is.

[mx6bfast]

Thanks for the responses.

I have 6 30 day late flags on my account, 5 of them from 2 cards when I started a DMP and payments were received. I sent goodwill letters the other day to ask to have them removed, so hopefully they will be.

[RobertEG]

mx6, I am not sure of your question as it pertains to "paid off accounts."  Paying off an account (closing in good standing) looks good from a financial perspective, but not necessarily from a FICO perspective.    Closing a revolv account in good standing results in loss of your CL on that account, and thus most likely an overall increase in %util, although its credit history continues to post for up to ten years from closing date, and of course the derogs post for 7 years from the deling date, open or closed, payed off or not.

Installment loans are a bit different.  Most who pay off installment loans are already at or  near the end of the loan term, and thus their install util is already low.  Paying off the install loan immediately drops it from your credit mix category of FICO scoring, and can hurt as much or more than it helps.  I would not necessarily expect any FICO increase for paying off an installment loan unless its balance was either high at the time it was paid off, or you have other installment loans to continue to maintain your credit mix. Based on the info you have given, no simple estimate can be made.

Message Edited by RobertEG on 06-18-2008 09:16 PM