How do credit missteps affect FICO Scores?

You may run into financial difficulties that impact your FICO score. Some difficulties may change your score by a small amount, others can drop your score significantly. What your score was before the difficulty appeared on your credit report also can make a difference.

Here is a comparison of the impact that credit problems can have on the FICO scores of two different people: Alex and Benecia. Note that their initial FICO scores are 100 points apart.

First, let's give you a general snapshot of Alex's and Benecia's credit profiles:

  | Alex | Benecia
:-- | :--: | :--:
Current FICO Score | 680 | 780
Number of credit accounts | 6 | 10
Lenght of Credit History | 8 Years | 15 Years
Credit Utilization | Moderate (40% to 50%) | Low (15 to 25%)
Reported delinquencies | A 90-Day (2 years ago)
and a 30-Day (a year ago) | None
Collections or adverse public records | None | None

  | Alex | Benecia
:-- | :--: | :--:
Maxing out a credit card | 650 to 670 | 735 to 755
A 30-day delinquency | 600 to 620 | 670 to 690
Settling a credit card debt | 615 to 635 | 655 to 675
Bankruptcy | 530 to 550 | 540 to 560

As you can see, maxing out a credit card has the smallest impact of these credit missteps.

Are you more like Alex or Benecia? Many different combinations of information on a credit report can produce a FICO score of 680 or 780. Depending on what's on your own credit report, your credit score experience may vary from that of Alex or Benecia. By taking a look at your own credit report and comparing it to the profile of Alex and Benecia, you might be able to learn what to expect if you happen to encounter a credit misstep.

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