What affect does late payments or foreclosure have on your credit score?

Transunion, Equifax and Experian keep their formulas for determining your credit score rather close to their chest, however here are some pretty good estimates as to what late mortgage payments, short sale, deed-in-lieu of foreclosure or a foreclosure will do to your credit score. There is quite the range listed here and this is because your credit score is a number between 350 and 850, and of course the higher you are, the farther you have to fall.  Also, the additional good credit you have can minimize the damage from the bad.  So here are the estimates:

One 30-day late payment = 10 to 110 points

One 90-day late payment = 70 to 135 points

Additional lates after 90-days have no additional affect to your credit score

Foreclosure, short sale or deed-in-lieu of foreclosure = 130 to 240 points

Bankruptcy = 130 to 240 points

It’s not scientific, it’s not exact, but I think it’s a good representation of the minimum to the maximum damage late payments, short sale or foreclosure can do to your credit.  Most importantly, don’t let anyone ever tell you that a short sale (selling your house for less than what’s owed on it with bank approval) will no hurt your credit score. It will.

On top of that, there will be a period of at least two (2) years before you can purchase another home after a foreclosure or deed-in-lieu of foreclosure.  You can purchase a new home immediately after a short sale as long as you were not delinquent on the mortgage of that home prior to the short sale.

Be sure to contact me if you have any questions.

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