When your credit score is 780, a single small late payment can bring down your credit score to 680. This means a 100 point drop in total. And this is not all. It will take almost 3 years to repair the damage.
# Why did your credit score drop by 100 points?
If you have a high credit score, you should be extremely careful at the time of paying bills. Once one late payment is reported on your credit report, your score can drop drastically and cost you a lot of money in borrowing costs. The higher your FICO score, the greater the penalty you have to pay for a single late payment. And, it will take a long time to get back to your previous credit score.
A 30-day late payment on a mortgage can drop your 780 score by 100 points. It will take almost 3 years to return to 780 again. What does this mean? It means your borrowing capacity will be crippled for the next 3 years. You may have to postpone your dreams of buying a new apartment for 3 years. That’s how your life gets affected here.
# What can you do to save your credit score?
Not many people realize that being 90 days late on mortgage payments is worse than 30 days. But the maximum damage is done by being reported late on your credit report.
# Other factors that may hurt your credit score
Unpaid collection accounts hurt your credit score too. However, if you pay off collection accounts, then they won’t hurt your credit score anymore. Thanks to the FICO 9.0 formula .
# Final words
The magnitude of the impact on credit score can’t be predicted since many other factors make a credit profile.