One prevalent misconception in the credit industry is that a single late payment is no big deal. The reality is, on-time payments are the single most important factor in the FICO formula. Research conducted by FICO shows that a single 30-day late payment on a mortgage can shave 75 or more points off of a consumer’s credit score. In addition, late payments remain on a credit report for two years. As a result, what may at first seem insignificant can have a major effect on a FICO score. 35% of your score is based on payment history. This is the biggest factor of the FICO algorithm.
If you had a high credit score before the missed payment, then the reduction in your score will be higher than if you had mediocre or poor credit. 700-plus scores can be dropped 100 points or more with a missed payment.
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