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Late loan payments
I wanted to know how long will one late mortgage payment hurt our overall credit scoring and FICO?
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1 Reply
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In general, even just one late payment for the mortgage can be quite damaging to your score, so you need to get a strong credit history. Here’s how it generally affects your credit:
Immediate Impact: If you are over 30 days past the due date and do not pay, your score will be hit by around 60-110 points. Logically speaking, those with a high score have more to lose with a single late payment.
Duration of Impact:
Short-Term (6-12 months): The impact takes time to develop, especially if you are able to maintain an otherwise impeccable history of making payments. The score can fully recover six months or a hundred days later, depending on whether the good information supersedes the negative one.
Long-Term (up to 7 years): It might last on report for over 7 years, but the pace at which the score takes a hit after 12 months is less severe, barring one factor, if there are continuous late payments after being paid.
Severity and Recurrence: If it’s a first or second-time late payment, for 60 and 90 days, respectively, then it won’t mean too much, but if it’s not the first time, that single late payment will scar your image for longer than necessary.
Improving Your Score After a Late Payment: A simple solution for the issue is to pay all scheduled amounts on time in the future. That helps build a positive payment history, which will offset past negatives.
When reaching out to the lender, why not ask for a goodwill adjustment in case they were late due to extenuating factors?
Please ask if you have further questions regarding credit recovery or other tactics!