Credit Score

The Road to Redemption: Recovering Lost FICO Points After a Missed Payment

Payment history is the most critical component of all credit scoring models, especially of FICO’s. Even if you pay just the bill’s minimum balance every month, your credit can reach excellent standing as long as you are punctual.

Naturally, a missed payment can hurt your credit badly. A single bill that is 30 days past due can knock tens of points off your FICO scores.

Fortunately, any credit card and mortgage company in Salt Lake City, Santa Fe, Denver, or any other major American city will attest that you can bring your credit where it used to stand quickly if you know what to do. Below are the most effective strategies to be on FICO’s good side in no time.

Find Out Whether It Is an Error

First of all, you should not suffer the consequence of any incorrectly reported payment. If you are positive that you have never been late but your credit reports say otherwise, dispute the inaccuracy immediately.

You can talk to the credit bureau that generated the report itself. But if the error was committed by data furnisher, you might have to talk it over with the company that reported the wrong information. If neither party agrees to remove the item in question, you can take your case to the Consumer Financial Protection Bureau.

Of course, you should file a dispute if you are sure that you are responsible for the late payment on your credit reports and you have evidence to back your claim. Otherwise, asking for the negative item’s removal will likely be futile.

Do Not Let Worse Come to Worst

Being 30 days late is not as bad as being 60 days delinquent. If you missed a payment, settle the bill as soon as possible to stop the bleeding. If you can’t zero out the balance, taking care of the minimum will suffice.

Prove That It Is Just a Bump on the Road

OVERDUE' red rubber stamp

If you honestly failed to pay your bill 30 days after it was due, you have to accept the drop in your FICO scores. You should move on and strive to ensure that the same behavior will never happen again.

The effect of the point reduction, regardless of its size, diminishes over time. It can ding your credit severely in the short term. You can quickly recover as long as you show that it is just an anomaly and does not paint an accurate picture of your creditworthiness.

Credit scoring algorithms are more interested in patterns rather than isolated behaviors. The late payment might still in your payment history for seven years, but it should not destroy your reputation as a credit user if you are a generally reliable payer.

Write a Goodwill Letter

Ask the company the submitted the negative info for its removal from your credit reports through a goodwill letter. It works if you have a lengthy history of punctual payment with the other party.

Creditors know that even the most financially responsible consumers could forget to pay a bill on time. Remember: you are judged by the sum of your financial habits over the years, not just one setback, so do not sweat it too much.

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