Payment history is a vital part of a consumer’s credit scores, so we debunk five of the most pervasive myths about late payments.
One prevalent misconception is that a single late payment is no big deal. The reality is that 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 seven years. As a result, what may at first seem insignificant can have a major affect on a FICO score.