How does a late mortgage payment affect my FICO score?

May 3rd, 2010

Even in the better parts of the Oakland Hills such as Piedmont, Montclair and Rockridge homeowners occasionally get into a financial pinch that can lead to a late mortgage payment.  If you’re delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much?  Until recently, those answers were hard to come by. Fair Isaac, which developed FICO scores, pulled back the curtain a bit, revealing some estimates of point-score declines following mortgage delinquency problems.

Here is the average hit your credit will take:
30 days late: 40 – 110 points
90 days late: 70 – 135 points
Foreclosure, short sale or deed-in-lieu: 85 – 160
Bankruptcy: 130 – 240

Some borrowers may think that because they never missed a payment, they can “walk away” from their homes with relatively little impact on scores. Not true. “When a deed-in-lieu or short sale is reported as a partial payment, it’s treated as a serious delinquency,” Watts said, “just like a foreclosure.”

Even if borrowers made payments faithfully for years before short selling or doing a deed-in-lieu, their credit score will still take a hit. The total decline will run about 85 points for the 680 score borrower to as much as 160 for the 780 score.

Mortgage debt, combined with other financial problems, can send borrowers into bankruptcy, the worst thing that can happen to your credit score.
Thanks to Rodger Smith at LaSalle Financial for this great info.

Brian Santilena, Sr. Sales Associate and top real estate agent with Pacific Union Real Estate, representing home buyers and home sellers in the Oakland Hills, Berkeley Hills and Piedmont California marketplace since 1998.  He is a Realtor, Certified Residential Specialist(CRS) and is highly knowledgeable in real estate for sale in the Oakland Hills premier neighborhoods such as Haddon Hill, Rockridge, Montclair, Glenview, Trestle Glen, Crocker Highlands, Oakmore, Laurel District and Redwood Heights.  Berkeley Hills neighborhoods such as Northbrea, Westbrea, North Berkeley Hills, Berkeley Flats, Thousand Oaks, South Berkeley, Gourmet Ghetto, Elmwood, Uplands, Claremont, LeConte.  City of Piedmont, City of Kensington, City of Albany.  Please feel free to CONTACT BRIAN if you have any real estate needs in Oakland, Berkeley or Piedmont CA.

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