Is there a diiference in how it affects your credit score, being 30 days late on a Mortgage vs. 30 days late on a Crwdit Card? Or what about 30 day late on a Loan/Installment account vs. a Credit Card account?Or are all 30 day lates treated the same?Thanks!
As a follow-up, How many months of on-time payments does it take to mostly recover from a 30-day late? 3 months, 6 months, 1 year, 7 years? I'm talking about recovering about 90% or so of the drop in score. Thanks!
I think it is hard to say exactly how long it takes to recover from any 30 day late because it depends on what happens to your credit after the 30 day late. One thing to consider if you are trying to purchase a new home or refinancing your current home it is going to be a lot harder to do so if you have a mortgage late verses a credit card or installment late. If you have to choose, I would pay your mortgage on time. Thanks! Heather with BoostMyScore.NET
It's too difficult to make an educated guess because there are so many other variables at play. The late pay will remain on your credit reports for 7 years, but the best thing you can do is proceed by building a lot of positive payment history which will begin to outweigh the old stuff. The FICO credit-scoring model places greater weight on recent activity, so as time passes by the late pay will become less and less of a factor in your overall scores. That said, on average, I would expect that more than a year would definitely be needed to recover 90% if you're doing everything else right too.
In response to Heather,That is what I was thinking, especially if a mortgage company was pulling a mortgage enhanced fico.I think a 30 date late on a mortgage account would be worse, even if tbe normal fico score hit is the same, it might take a bigger hit on a motgage enhanced fico or with all things being equal, someone making a decision might say that even though the fico score is the same, he may judge someone that missed a mortgage payment vs a credit card payment as a big risk.I'm not about to do either but was asking for a friend of mine who is struggling and trying to decide what to do. There is a mortgage payment assistance loan they are applying for but it could take 30-45 days. This State government program can enter a stay of foreclosure to prevent that but they said the mortgage company could still report the loan as 30 days late.So they are trying to decide how much that might affect them, the 30 day late on the mortgage, or should they look at some other immediate way to get this month's mortgage money vs waiting 30-45 days for this program to kick in.
To Joshua Heckathorn, that surprises me it wojld take a year. I was expecting perhaps a year. So if someone is looking to refinance in 6 months or so, they should defintely not allow a 30 day late on their mortgage.
Definitely not. It will not only hurt your FICO scores, but a mortgage underwriter would definitely have an issue approving a loan for someone that just had a 30-day late within the past 6 months.
If it's your first offense, I'm not sure either your credit card company or your mortgage bank would immediately report to the credit agencies for 30 days late. For the first time in my life this month I accidentally paid a credit card late - I had simply forgotten about it and called to pay about 5 days after it was due. They assured me that my credit was not ruined and said that they (Discover in this case) don't even report to the agencies until > 30 days. I wouldn't push it obviously but if you keep it to 30 days it may not be the end of the world. My guess would be your mortgage company would be at least as flexible, maybe a tiny bit more but just a guess.
