How Much Do Credit Mistakes Hurt Your FICO Score?

Most people know that paying late hurts your credit score. But in the past it was a closely guarded secret as to how much it really hurt.

FICO (the most widely known type of credit score, developed by the company previously known as Fair Isaac Corporation) has now released the chart below which shows exactly which types of money mistakes negatively impact your credit score, and by how much.

-- So, if you miss a payment, your score will go down 60-110 points.
-- And if you max out a credit card, your score will go down 10-45 points.

You'll also notice that the better your credit, the more a single mistake will hurt your score. So do everything you can to avoid these common credit errors!

This data is called "damage points" and gives you a detailed look at the firm's once-secret - and still mysterious - credit scoring model. Now you'll know exactly how much it will hurt your credit score when you make these common credit mistakes.

Hopefully it will give you enough information to make changes with the way you handle money. And will help you realize that mistakes, like missing a payment, really do cost you points - and more importantly cost you money. And while these mistakes won't stay on your credit report forever (typically they drop off after 7 years) they will cost you in the following ways:

• Higher interest rates
• Higher minimum payments
• More interest paid over time
• Less likely to get approved for new credit

Most importantly, you need to get control of the very causes of the mistakes. If not, your credit score will keep falling. And you'll keep having to pay more than you should. So:

1. You need to reduce your debt.
2. You need to pay on time, stop borrowing, and start saving.
3. You need to fix your past credit problems.

Once you are able to make progress with the first 2 steps, you'll be ready to begin repairing your credit problems and improving your credit score.

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