Unclear on when this situation would fall off

[CreditCurious]

I am not very knowledgable on the specifics that you are asking.  Here is my rough understanding.

For most delinquencies, one will hurt you a  lot, but two are not twice as bad as one. So each delinquency has less impact than the one before it.  Minor delinquencies will count at full, or close to full impact for about two years, and gradually decline in impact after that.

Major delinquencies (150/180 days) will have an even bigger point decrease, and that impact will be strong for the entire time they appear.  In my case, when my 150/180 day dropped off, my credit rating jumped 70-80 points after 6.5 years.  I had no other derogatory remarks, so that seems to be a value I could point to with some confidence.

Most things in FICO-world seem to have changed impacts at certain benchmarks.  In other words, it seems like you do not gain just a few points/month, but you get larger point increases at 6 months, 12 month, 36 months (or whatever) after any given incident.   

But all of this is really vague and dependent on a lot of factors.  The reality is that as your delinquencies age, your AAoA is going up, so when your score goes up, is it becuase your delinquencies are aging, or because your credit history is getting longer? Delinquencies drop off, but so do hard pulls.  7-8 lates are going to be worse than 2-3, but if the 7-8 are all 30 days and old, but the 2-3 are 120 days or more and recent, I strongly suspect the 120 day lates are going to be worth more points.  A late payment that goes to collections will have negative impacts for both the late payments to the bank, and also because you are in collections.

All in all, you have not provided any solid examples of what you are asking about, so your lack of detail will result in a lack of detail from anybody answering you.  Also, there are so many factors, and the FICO algorithms are proprietary, so anybody responding is mostly doing educated guesswork.

[Thomas_Thumb]

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@Cblough93 wrote:

@CreditCurious 

I also understand 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?

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. 

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There is no magic age for all lates. The "decay curves" differ depending on severity. They are neither linear nor exponential. There appear to be step changes at certain age times where the decay curve characteristics are modified.

Penalty associated with 30 and 60 day lates drops substantially after 24 months. Not so for 90 and 120 day lates. Their negative impact on score tapers some but maintains high impact until 60 months age. In all cases lates hurt score for 7 years.

Side note: with Fico 8/9 and likely 10 a 30 day late won't prevent a profile from being assigned a clean scorecard.

[Cblough93]

Actually your answer was more or less exactly what I was looking for. Even with the little information I was able to provide. 

[Patient957]

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@Thomas_Thumb wrote:

Penalty associated with 30 and 60 day lates drops sunstantially after 24 months. Not so for 90 and 120 day lates. Their negative impact on score tapers some but maintains high impact until 60 months age. In all cases lates hurt score for 7 years.

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The only difference between my Ex and Eq reports is a string of lates culminating in a 120 day late that is now 6 years and 3 months old.  The installment account was not charged off and is still on both reports, with the Ex report being clean.  The difference in score is a whopping 43 points (774 Ex vs 731 Eq).  So 120s sting pretty good for the whole 7 years.

[Cblough93]

There is a difference between my reports as well. TU and exp have  a couple sporadic 30 day lates on them, while equifax does not. Lates vary from 2.5-4 years old. 

my equifax is at 770 while the others are at 730/720.  So a large difference. Although my lates are far more recent that yours. I was mostly wondering when I could expect the scores to start to close the gap a little. I thought once my most recent late payment hit 2 years of age I would see a large uptick in my scores. But I did not. 

[Thomas_Thumb]

A single 30 day late may still cost 25-30 points after 5 years. Multiple 30 day lates cost a bit more. By comparison a single 120 day late can continue to cost 50-60 points after 5 years.