Post by Finova World Consulting

The impact of these negative items on your credit score depends on several factors, including your current score, credit history, and the severity of the issue. Here’s an approximate breakdown. 1. Late Payment -Impact: 60–110 points - A late payment typically causes a more significant drop for those with excellent credit. The severity depends on how late the payment is (30, 60, or 90+ days). 2. Debt Settlement -Impact: 50–125 points - Debt settlement signals to creditors that you did not pay the full amount owed, which can significantly lower your score. The impact is greater if your score was initially high. 3. Foreclosure - Impact: 85–160 points - Foreclosures are considered a major derogatory event. The higher your credit score before the foreclosure, the more significant the drop. 4. Bankruptcy - Impact: 130–240 points - Bankruptcy has one of the most severe impacts on your credit score. Chapter 7 bankruptcy stays on your report for 10 years, while Chapter 13 remains for 7 years. 5. Collections -Impact: 50–110 points - The drop depends on your credit score before the collection. Accounts sent to collections are flagged as a significant delinquency. 6. Hard Inquiry - Impact: 5–10 points per inquiry - Hard inquiries have a minor impact compared to other derogatory marks, and their effect fades after a few months. They stay on your credit report for 2 years but typically only affect your score for the first 12 months. Key Considerations: - The higher your credit score before the negative event, the more significant the impact. - Negative items, like late payments and collections, have less impact over time as they age and if positive credit behavior is maintained. - Multiple issues (e.g., late payments followed by collections) can compound the damage to your score. Pro Tip for Recovery: - Dispute inaccuracies on your credit report. - Focus on paying on time and reducing balances. - Consider working with a reputable credit repair company to address these items effectively. If you have questions or need guidance, book your free consultation today! Link in bio https://lnkd.in/en-Cg_S3 https://www.finovaworld.io