If you are interested in purchasing a home, do you know what your credit score is? Or how a poor credit score could effect your ability to buy a home? Have you ever been interested in understanding how far a credit score can drop with late payments, foreclosure, short sale activity or bankruptcy?
This should give you an idea:
30 days late: 40 – 110 points
90 days late: 70 – 135 points
Foreclosure, short sale or deed-in-lieu: 85 – 160 points
Bankruptcy: 130 – 240 points
To come to these figures, Fair Isaac created two hypothetical consumers, one who starts out with a fair-to-middling score of 680 and the other with a very good one of 780. (FICO scores range from 300 to 850.)
The hypothetical person with the 780 FICO has 10 credit accounts versus six for the 680, plus a longer credit history, lower utilization of total credit limit and no missed payments on any account. The other consumer has two slightly damaged accounts. Neither have any accounts in collection or adverse public records.
Borrower #1 Borrower#2
680 780 Initial Score
620-640 670-690 30 Day Delinquency
595-610 645-665 90 Day Delinquency
575-595 620-640 Foreclosure Short-Sale
530-550 540-560 Bankruptcy
Source: Fair Isaac Corp.
If you are interested in purchasing a home, make sure you know your credit score and do your homework to increase your credit score if necessary.