Do Late Payments Have Less Effect on Closed Account??

[CreditDunce]

It is a long shot, but was the account disputed?  Disputed accounts are not counted in FICO scoring....

[theheater30]

I did not dispute them. I was curious that maybe the creditor did one but I have checked my reports on here and nothing as well as my past reports on CK to look for a dispute comment and nothing shows.

[theheater30]

So what happened to me is just strange and late payments always matter even if the account is closed?

[Revelate]

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@theheater30 wrote:
So what happened to me is just strange and late payments always matter even if the account is closed?

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Any derogatory or delinquency matters regardless of tradeline state (unless disputed, sometimes).

30 day lates are unquestionably minor in the grand scheme of things, but since you already had a 30 day late on it, the usual diminishing returns almost assuredly apply.  Without seeing your report in more detail I can't really offer anything more than that, but while additional lates (or tax liens, or collections, etc ad naseum) move your score within a scorecard, it's the first one which is used to assign you to a scorecard.

To give the classic and somewhat absurd example in this instance from my data: EQ Beacon 5.0 (FICO 04): brand spanking new Federal Tax lien placed on my credit report: -5 points.  Or the most recent change, removing a collection from all 3 reports on FICO 8: +5 points.  The reason why is I still have my CA State Tax lien on there from 2010 and I won't see any major shifts until that's gone.  

Removing 3/4 lates, depending when that last 30 day late was from, may well not produce any change in score.

[Anonymous]

R raises a point that I meant to ask you earlier.  It's about the fourth late, i.e. not the three that were removed, but the one and only one late payment that still shows on all your reports.  When did that late payment occur?  (Month/year)  And when did the other three occur? 

I'm also curious: was this "4th" late payment on the same account, or on a different account?

[Anonymous]

Is there a thread somewhere that someone can link that discusses the different severity of late payments (30, 60, 90 etc) and their relative weight compared to one another over time with respect to their impact on score?  Has anyone at least in part figured this out?  Something like a 1 year old 30 day = a 2 year old 60 day = a 4 year old 90 day = a 6 year old 120 day etc... just throwing out numbers there for the sake of discussion.

I've read that 30/60 day lates only impact FICO scores for a year or two and then are more or less irrelevant score wise.  So then I'm curious about 90's, 120's, 150's etc.

[RobertEG]

Open or closed is not the issue.  That only refers to whether a consumer continues to have ability to gain further credit on the account (it is "open"), and does not relate to derogs reported on the account.

Once any delinquency is reported, it begins to age in FICO scoring.

The issue is whether some later reporting effectively replaces that earlier reporting, and thus updating the derog in scoring.

For example, a 30-late begins to age, and if no later delinquency is reported, its impact will lessen.

However, if a 60-late is then reported, the 30-late is replaced with a more recent, and higher level, of derog, so it no longer "ages down."

More subtle is the updated reporting without an increase in level of delinquency.

If a creditor has reported a level of delinquency, such as a 90-late or charge-off, and then ceases updating, the derog ages in scoring.

However, if they report that the account remains delinquenct at that same level, FICO considers that as effectively beginning that same derog anew, as it has now been positively affirmed that it remains delinquent up to the current update dating.

Similary, while debt collectors dont report monthly lates, when they update their collection and it reports it is still open with a balance, that informs FICO that the length of delinquency has increased, and FICO then updates its scoring to effectively show a new date of "delinquency."

Collections only age if they are not updated.

[Anonymous]

I'm somewhat undertstanding what you're saying, but not quite.  Are you referring to derogs that are in a string, like March/April/May of 20XY showing a 30, 60 and 90 late?  So since the 90 is the most current in that string of derogs it carries the weight and the 60 and 30 don't impact the FICO score as the 90 includes both of those?  So essentially if you have a 30/60/90 in a row if a lender deletes the 30 and 60 but leaves the 90 is nothing accomplished scoring wise?

Hopefully that makes sense.  Thank you for the feedback.

[RobertEG]

Any 90-late, for example, must, by definition, have been 30 and 60-late in the prior months.

The fact that a creditor did or did not report those prior derogs does not change the facts and thus risk assessment of being 90-late.

There are two possibilities on how FICO could score progressive delinquencies.

First is that each reported late is scored separately, and then they are summed to produce the total scoring impact.

The second is that only the highest, current level of delinquency in a chain is scored, with its scoring incorporating the inherent fact of any lower delinquencies.

While FICO has not disclosed their specific methodology, option 2 is the one that makes sense, and I assume is the method used.

Otherwise, two consumers, both with identical payment history, would be scored much differently depending only upon whether the creditor chose to report each and every delinquency, or has onlyy reported the current level of delinquency.

As for any mystery regarding a 30-late that occured last year now having little or no scoring impact if now deleted, it is a minor derog that has likely simply lost its scoring impact.

[Revelate]

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@Anonymous wrote:

Is there a thread somewhere that someone can link that discusses the different severity of late payments (30, 60, 90 etc) and their relative weight compared to one another over time with respect to their impact on score?  Has anyone at least in part figured this out?  Something like a 1 year old 30 day = a 2 year old 60 day = a 4 year old 90 day = a 6 year old 120 day etc... just throwing out numbers there for the sake of discussion.

I've read that 30/60 day lates only impact FICO scores for a year or two and then are more or less irrelevant score wise.  So then I'm curious about 90's, 120's, 150's etc.

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Well a somewhat interesting datapoint from my stupid moment on TU from back in October (30+ day late):

3/16 I still had this as my #2 reason on TU:

You recently missed a payment or had a derogatory

indicator reported on your credit report.

This month 4/16, I'm now back to my old #2 which is the same across bureaus now:

You have a short credit history.

Interestingly this was for FICO 8, FICO 9 models even on the March pull had my #2 as short credit history, even Bankcard strangely enough.  I may go pull the 1B and see if the reason codes shifted for FICO 04 as well as 8 classic... but apparently there's a breakpoint at the 6 month explicitly though I saw similar data on FICO 8 a while ago when I had a tax lien tacked on (before it got airstruck, FICO 04 didn't move, but FICO 8 had mostly recovered in six months albeit because there was already a tax lien on there from 2010).

ETA: Pre-snafu it was in the #4 slot for FICO 8, and #2 for FICO 04... so no need to pull 1B now since when that was pulled the 30/60 lates were more than 4.5 years old at the time.

That's all I have for any good data for aging of a given late, something for me to track over time on TU but I would expect to be at the roughly two year mark before it becomes irrelevant based on prior forum conventional wisdom.