How Much Will Your Credit Score Drop With A Foreclosure?

November 30th, 2009 | Category: Credit Scores

Many times public will ask me “how much will my credit score drop whether I have a short sale? What whether I have a foreclosure?” and usually, my reply was something like “it will hurt your credit, but no one can really tell you precisely how much it will hurt your credit.”

Until now.

Fair Issac Corporation (FICO) has just released some of the top financial missteps that public invent regarding their credit and precisely how much each one can impact their credit score. FICO did that to help educate citizens about their overall credit profile and give them an concept of what kinds of things can negatively impact their credit score.

A few highlights of the common mistakes society prepare and how many “damage points” they can expect:

If your credit score is currently 780:

Maxed out credit card – 25-40 points
30 Day Late Payment – 90-110 points
Debt Settlement – 105-125 points
Foreclosure – 140-160 points
Bankruptcy – 220-240 points

If your credit score is currently 680:

Maxed out credit card – 10-30 points
30 Day Late Payment – 60-80 points
Debt Settlement – 45-65 points
Foreclosure – 85-105 points
Bankruptcy – 130-150 points

According

to FICO spokesman Craig Watts:

“I hope that knowledge will help citizens to better understand FICO scores and the value for them of avoiding credit missteps. It illustrates key points such as the higher your score, the farther it can fall whether you stumble. Getting and maintaining a good score isn’t complicated. We all just need to pay our bills on instance, keep credit card balances low and take on new debt sparingly. ”

With the revealing of at least part of their overall FICO formula of how your credit score is calculated, one thing that is now known is that those citizens who have excellent credit have more to lose with a mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score — 780 — that same delinquency can send a FICO score tumbling by 90 to 100 points.

It appears as whether FICO is making steps toward making your credit score more transparent – so that you can not only have access to your credit score, but you can plus now know what kind of damage you can do to it by making a mistake.

Orginal post by Justin McHood

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