How long does it take to rebound from late payments?

[masscredit]

I have a family member who recently experienced some speed bumps in life. She fell behind on her credit card and car payments. The car was four months behind so they were planning to pick it up in two weeks. She got out of the bad situation she was in (boyfriend was an anchor) and is working on getting everything caught up. We haven't pulled her scores but I'm sure they took a nose dive into the low 600s if not worst. How long does it take to recover from something like this so she can see scores in the 700+ range? 

[Anonymous]

120 day lates still majorly affect credit reports beyond the 2 year mark. Best bet is to start a goodwill letter campaign to try and get them removed. 

[Anonymous]

How long it takes to get back to 700's depends largely on the thickness and age of her file.  If she's got a thick/aged file, rebounding from a 120 day late could happen quicker.  I was able to achieve 750-768 scores with 90 day and 120 day lates on multiple accounts and those lates were around 3 years old.  The reason my scores were still pretty strong considering the multiple major baddies was because my file was thick (maybe 15 accounts) and aged with my AoOA around 15 years and AAoA probably 5 years at the time give or take.

There are other people with thin/young files that can't break into the 700's even with their last major baddie being 6-7 years old, so it really depends on the profile in question.

[masscredit]

She has two cards. One is a store card that is about 2 years old. The other is a Visa that might be a little over a year. For the auto loan, she's lucky if she made 4-5 payments before that fell behind. 

[Revelate]

She will get a tick up by the six month mark on FICO 8 (there seemingly were a lot of steps upward after a recent late for me), then I got a small increase across the board at 1 year. I am expecting more whenever the late stops counting as recent.

I also have a thick and mostly optimized file and I just ticked over a year on TU with a 60D (dirty scorecards) and FICO 8 was a 749... and actually FICO 4 was a 747 even with some awkward balance penalties and I would note that qualifies me for the highest conventional mortgage tier.

So a 120D isn’t a death sentence but the bigger issue is the lack of history in this case. Much like you had to do masscredit she needs to establish some tradelines and then hang out.

Really a 120D late should track similarly to your tax lien in terms of score improvement; admittedly I think they are different scorecards but it is a good rough estimate to go by.

[EW800]

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@Anonymous wrote:

How long it takes to get back to 700's depends largely on the thickness and age of her file.  If she's got a thick/aged file, rebounding from a 120 day late could happen quicker.  I was able to achieve 750-768 scores with 90 day and 120 day lates on multiple accounts and those lates were around 3 years old.  The reason my scores were still pretty strong considering the multiple major baddies was because my file was thick (maybe 15 accounts) and aged with my AoOA around 15 years and AAoA probably 5 years at the time give or take.

There are other people with thin/young files that can't break into the 700's even with their last major baddie being 6-7 years old, so it really depends on the profile in question.

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I agree completely with BBS.  I had two 120's showing, one from a foreclosure and another from a credit card settlement.  After three or four years of good history, and a thick file, I was able to get most of my scores into the 740-750 range.  The sting of the 120's absolutely stuck around every second of the seven years though, as it was not until they completely fell off that my scores went north of 800.  

[Anonymous]

If the problem was really her BF, and not herself, she should get as many new (good) accounts as possible. The reason is that the damage has already been done, and she has a super-thin file. I would get a secured-loan from bank, and a secured-card if possible. The amounts would naturally be as low as possible, say $500. She is going to need all the help she can get, so she should act now to get new accounts so that her AAoA is good later. Also, a big mistake made by newbies is to overestimate positive behavior vs. negative behavior. Credit has more to do with watching how bad you have been, not how good. Because of that, those cards are death to her score. If she thinks that, by being "good" with the cards she has, and not being proactive, is sufficient, that would be incorrect. She has to be proactive to fix this problem, and new accounts is something that she can control. Those two cards are going to be tagging her 5 years from now.

[Queen_Etherea]

I have one 30 day late that's still majorly affecting my scores. I always thought a single 30 day hurt less the older it was, but my TU and EX scores are 20-30 points higher than my EQ and the ONLY difference is that 30 day late. It's only on my EQ report because EQ is a bunch of poopslinging trolls who refuse to delete it even though it's been requested to be fixed by the loan company multiple times.  

Unfortunately, at this point, the only thing your friend can do is send some goodwill letters/emails in the hopes of getting the lates removed. 

Did anything end up in collections? Also, you can do the $1 trial with Experian and see all 3 bureau's scores. 

[Revelate]

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@Queen_Etherea wrote:

I have one 30 day late that's still majorly affecting my scores. I always thought a single 30 day hurt less the older it was, but my TU and EX scores are 20-30 points higher than my EQ and the ONLY difference is that 30 day late. It's only on my EQ report because EQ is a bunch of poopslinging trolls who refuse to delete it even though it's been requested to be fixed by the loan company multiple times.  

Unfortunately, at this point, the only thing your friend can do is send some goodwill letters/emails in the hopes of getting the lates removed. 

Did anything end up in collections? Also, you can do the $1 trial with Experian and see all 3 bureau's scores. 

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There's only a few concrete late aging breakpoints generally.  I did see a concrete move at the 1 year mark, and I know there will be another when my own 30D stops counting as late, but as near as I could tell with my tax liens there was maybe one breakpoint and that was it.

30D late does penalize you cause it scorecard assigns for as long as it's on there, but 30 points isn't a major penalty to be fair.

[Anonymous]

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@Queen_Etherea wrote:

It's only on my EQ report because EQ is a bunch of poopslinging trolls who refuse to delete it even though it's been requested to be fixed by the loan company multiple times.  

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I'm not following this.  What do you mean EQ "refuses" to delete it?  If you have documentation from a lender that states that an item shouldn't be present, that's more than enough ammo to have EQ delete it.  If for whatever reason they're dragging their feet, file a claim with the BBB and CFPB against them and upload your documentation.  I'd be shocked if within a week the account didn't read exactly as your documentation states.