Posts Tagged FICO
Transunion reports that 56 percent of Americans did not request the free annual credit report they are entitled to. The Big 3 credit bureaus, Transunion, Equifax and Experian recommend checking your credit every three months to verify that nothing you don’t know about that can affect your credit has happened. This can get expensive though since each bureau wants to charge for anything after the first credit report “pull” and of course they want to sell you credit monitoring services.
Here is my recommendation:
Pull a credit report free from just one of the bureaus every four months.
This way you can look at whats on your credit three times a year for free. You can pull your free reports from AnnualCreditReport.com.
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.