This post originally appeared May 31, 2018 on CreditCards.com as “Late payment? 4 ways it impacts your credit score”
By Barry Paperno
Dear Speaking of Credit,
My credit score was in good shape till one or two weeks ago – 705 points on Equifax and 740 on TransUnion. However, I had one late car payment and my score dropped 40 points!
I am hoping to close on a home with a FICO score goal of 720 points in six or seven months.
Assuming I keep all other payments the same and keep my credit utilization below 10 percent, can I recover my credit score back to 720 in seven months? – Nader
Though we don’t know for sure if this was your first late payment, considering that your scores have remained above the average FICO score (over 700 points) despite this recent mishap, we’ll assume that any prior minor delinquencies will have occurred at least a couple of years ago or so.
You are about to learn why knowing the entire history of all past and present late payments can be essential when trying to determine the major negative influences on your current and future scores before setting out on your score rebuilding journey.
When attempting to understand what it will take for your score to recover, it always helps to not only know what has hurt your score, but also knowing how it got there can often provide a roadmap that will eventually help you undo much of the damage and enable you to better prioritize those rebuilding efforts.