How things adversely affect your credit score

The formula that is used to calculate your credit score has always been, to quote Winston Churchill, a riddle, wrapped in a mystery, inside an enigma.  The following charts are very interesting indeed:

The original FICO blog post is available here.  They made the following notes, I found the magnitude effect on higher scores to be particularly interesting:

  • The magnitude of FICO® Score impact is highly dependent on the starting score.
  • There’s no significant difference in score impact between short sale/deed-in-lieu/settlement and foreclosure.
  • While a score may begin to improve sooner, it could take up to 7-10 years to fully recover, assuming all other obligations are paid as agreed.
  • In general, the higher starting score, the longer it takes for the score to fully recover.
  • Even if there’s minimal difference in score impact between moderate and severe delinquencies, there may be significant difference in time required for the score to fully recover.

Hat tip to who has some additional analysis.  You may also find 11 Credit Report Myths over at interesting.  Finally, My Money Blog, has a fun flow chart to getting your credit score.

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