Monday, April 30, 2012

FALLOUT FROM A POOR CREDIT SCORE...

Carpe Diem...Real Estate Update
FALLOUT FROM A POOR CREDIT SCORE
IF you want to see how quickly you can ruin a great credit score, just skip a mortgage payment.

In a study last month, FICO looked at how choices would affect three hypothetical mortgage holders: One with a spotless 780 score; another with a good 720, who may have missed a couple of credit card payments three years ago; a third with a not-great, not-toxic 680, who has sometimes fallen seriously behind on credit cards or a car loan. (Most lenders consider poor credit about 650 and below)
  • 30 days late: The gold-plated 780 drops to 670-690, the middling 720 becomes 630-650, and 680 is now 600-620. Effects are most significant for the strongest borrower. “A continued progression is going to have less and less impact on a score,” Ms. Gaskin said.
  • 90 days late: This is seriously delinquent, and brings the onetime best borrower down to 650-670, the midlevel one to 610-630, and the weakest to 600-620. 
  • Short sale, deed in lieu of foreclosure, or settlement, assuming the balance has been wiped out: The result is just a bit less serious. The 780 score deteriorates to 655-675; 720 to 605-625; 680 to 610-630.
  • Foreclosure, or short sale with a deficiency balance owed: For either, 780 is 620-640; 720 is 570-590; and 680 is 575-595.

At a certain point it might seem as if there was not much difference between bad and worse, but remember that the lower the score, the longer it takes to climb back.


Please read the full article on The New York Times








NewPanda Copyright NewPanda - All rights reserved.





Ron Goldstein

MBA, EcoBroker, QSC

phone: (312)264-5846
mobile: (312)771-7190


Logo

listing update
Post a Comment