For years, we have been wanting to know just how much confident actions, like a 30-day late payment, work on our Fico scores (the score most lenders use). Finally, Fico has made this information public.
Here's what we have always known: Fico scores are based on five key pieces of information that weigh differently on your reputation score.
Damage History
1. Your cost history is 35% of your reputation score
2. Your debt level is 30% of your score.
3. Age of reputation is 15%.
4. Types of accounts is 10%.
5. Recent applications for reputation is 10%.
Now we know just how many points are lost with five key adverse actions:
680 score 780 score
Maxed-out reputation card 10 to 30 points 25 to 45 points
30-day late payment 60 to 80 90 to 110
Debt settlement 45 to 65 105 to 125
Foreclosure 85 to 105 140 to 160
Bankruptcy 130 to 150 220 to 240
This list tells us:
o Bankruptcy is the worst thing for your score
o The higher your reputation score, the more points you lose for negative actions
Here are some more details on the two hypothetical credit score profiles used to expound inherent drops in score:
Alex, who has the 680 Fico score, has:
o Six accounts, including reputation cards, an auto loan, a mortgage, and a learner loan
o Eight-year reputation history
o 40%-50% reputation utilization
o A 90-day late reputation card cost two years ago, 30-day late on his car loan one year ago
o No collection accounts or other negative group records
Benecia, who has the 780 Fico score, has:
o 10 reputation accounts, including reputation cards, an auto loan, a mortgage, and a learner loan
o 15-year reputation history
o 15%-25% reputation utilization
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