How Your Credit Score Changes Once Negative Info Disappears

Photo by garagestock / Shutterstock.com

Making even one 30-days-late payment on a debt can cause your FICO credit score to plummet by 60 to 110 points.

But what happens to your credit score when the late payment is eventually purged from your credit history? The credit scoring company Fair Isaac Corp., or FICO, recently set out to answer this question by analyzing its data on U.S. consumers who had a serious delinquency — meaning a debt that was at least 90 days past due — between 2009 and 2010.

Under a federal law known as the Fair Credit Reporting Act, delinquencies like late payments are generally removed from your credit report after seven years. This tends to improve your credit score because credit scores are generally based on the information in your credit report.

When FICO looked at consumers who had a single delinquency removed from their credit report between May 2016 and July 2016, it saw a credit score increase of 14 points, on average.

Looking at consumers who had all of their remaining delinquencies removed from their credit report between May 2016 and July 2016, FICO found they experienced a credit score increase of 33 points, on average.

If you’re wondering why scores didn’t increase more, FICO offers three possible explanation:

  • The analysis examined score change over a three-month window, so the purged delinquencies may not be the only factor contributing to score changes during that window. “A lot can happen — a new delinquency, or running up credit card balances, for example,” FICO notes.
  • The FICO credit scoring formula considers how old a delinquency is, giving less weight to older delinquencies.
  • Some consumers included in the analysis had other, more recent delinquencies and negative info in their reports. FICO says this means removing a serious delinquency would not improve those consumers’ scores much.

The good news is that it’s still possible for small credit score increases to improve your ability to get credit. FICO explains:

“Credit availability would increase if the consumers’ score rises resulted in the consumers now meeting lenders’ baseline score thresholds.”

For example, looking at the consumers who had a delinquency removed from their credit report between May 2016 and July 2016, FICO found that the portion with a credit score above the 700 threshold increased by 5.9 percent. Looking at the consumers who had all delinquencies removed during that window, the portion with a score above the 700 threshold increased by 21.1 percent.

Do you know what’s in your credit reports?

FICO’s research highlights the importance of your credit report — knowing what’s in it, checking it regularly and disputing errors and other negative information.

Again, your credit score is based on the information in such reports. And as we explain in “Boost Your Credit Score Fast With These 7 Moves“:

“Like it or not, your credit score dictates everything from whether you’re approved for a credit card to what rate you’re offered on a mortgage. … it can also make or affect your job prospects. Employers can and do pull credit reports before making hiring decisions.”

There are three nationwide credit reporting agencies that maintain credit reports on consumers — Equifax, Experian and TransUnion. Under federal law, they each must give you one free copy of your credit report annually. You can request it at AnnualCreditReport.com.

If you find any errors or delinquencies on your credit report, know that you can correct or dispute them — even delinquencies that are less than 7 years old. For example, Money Talks News founder Stacy Johnson breaks down so-called zombie delinquencies — which he has experienced personally — and how to get them removed from your credit report in “Ask Stacy — How Can I Get a Delinquency Off of My Credit Report?

For more help, check out “Fixing Your Credit? Do These 5 Things, Avoid These 3.”

If you feel overwhelmed by the task of repairing your credit, check out “Get Help Restoring Your Credit” instead. It will guide you to a reputable credit restoration expert if you decide that the do-it-yourself credit repair route is not for you.

Are you surprised by the findings? Sound off below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Reasons You Should Consider a Career Change at 50
7 Reasons You Should Consider a Career Change at 50

Wondering how to change careers at 50, or if it’s possible at all? The good news is that many older workers have the energy and experience to pull it off.

7 Ways Coupons Waste Your Money and Time
7 Ways Coupons Waste Your Money and Time

Here’s why I hung up my scissors and quit clipping coupons.

8 Types of Companies That Check Your Credit Report
8 Types of Companies That Check Your Credit Report

Federal law lets these entities peek at your credit — regardless of whether you’re borrowing money.

17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

Small Splurges That Make It Feel Like You’re Living Large
Small Splurges That Make It Feel Like You’re Living Large

Cutting costs is the shortest path to financial freedom. However, there are times when a little spending can produce big returns.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.