Expert: Regan Shinski - 12/1/2009

Question
Hello - last night I heard on the evening news a bit about FICO and credit scores. They were showing how much certain things affect your score. they were saying a foreclosure or bankruptcy will  drop a score from 140 - 160 points. if you are 30 days late it can drop it from 110 - 140 and there was one other that I cannot recall. My question is: is that per account..it will drop that much for every account im late on and so forth and so on? or this is every 6 months/year???

Answer
Hello Andy:

The reasopn they gave ranges that your score can drop is because the public really does not know the exact formula that goes into a credit score.  It is VERy complex and proprietary inforamtion for the Fair Isaac (FICO) company.  It is a tightly guarded secret, so no one can say "if you do this, you score will drop XX points."

What I can say is that the first major derogatory item has the most impact on your score.  If you score is 800, you have a lot further to go than someone who is already at 500, so it stands to reason the biggest drops happen the first time something goes bad and less as additional accounts go derogatory.

Additionally, accounts that are CURRENTLY delinquent have more of a negative impact than accounts that were late but are now caught up.

Finally, the only thing that can improve this is credit repair and time.

For more information, you should see this link:

http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

Thanks,
Regan
mbscompany@aim.com