Report sheds new light on impact of late payments on credit scores

A report by the company that created the nation's credit-scoring system provides a rare glimpse into the way late payments or a foreclosure can hurt a borrower's rating.

Q. I ran into some financial problems recently and wound up making my mortgage payment about 30 days after it was due. I am back on my feet now and made up for the late payment, but can you tell me how my problem might affect my credit score?A. Your tardy payment will no doubt lower your score, but the extent of the damage will depend on several variables - including whether you have ever been late before, how well you have handled your other debt and even how many credit cards and other types of accounts you have.Lenders and credit bureaus have always been a bit reluctant to place an actual "point value" on the size of the hit that a late payment will deliver to a consumer's account, rightfully noting that even a single delinquency can affect one borrower far more greatly than another. But a recent report by Fair Isaac, the company that created the national FICO credit-scoring system, sheds a little more light on the issue.If you're 30 days late on a payment, the Fair Isaac report says, your credit score will likely drop between 40 and 110 points. The decline will be on the lower end of the scale if you have never been late before and you have lots of other accounts that are in good standing, but you could be in for a triple-digit hit if you've recently been late on other payments or your mortgage account makes up the bulk of your current credit profile.It gets worse if your payment becomes 90 days late, which lenders consider "seriously delinquent" and may even cause them to begin foreclosure proceedings. If your last payment was made three months ago, figure on seeing a 70- to 135-point drop in your score.If the bank indeed forecloses - or if you sign a "deed-in-lieu," which gives the property back to the lender without the need for formal foreclosure proceedings - expect your credit score to fall between 85 and 160 points.Not surprisingly, filing for bankruptcy is the absolute worst thing you can do to your score: It'll knock off between 130 and 240 points.The bankruptcy would stay on your record for up to 10 years, although your score would begin to recover sooner if you could establish a few new credit accounts after the filing and make all of the required future payments promptly.Q. We had a 90-day listing agreement to sell our home with a local real estate agent, but we never received a suitable offer and the listing with her expired Aug. 20. A couple who had visited our home while we were under contract with the agent has since called us and has agreed to pay us close to our original asking price. If we sell, would we still owe the agent a 6 percent sales commission?A. Yes, almost certainly. Most listing agreements include a provision that requires a seller to pay the agent a commission - even if the contract recently expired - if the buyer first visited the property while the salesperson was actively marketing it. Courts in nearly every part of the nation have upheld the legality of such clauses.You probably wouldn't owe a commission if the buyer had never visited the property when the agent was still trying to sell it, but that's not the case here.Because you'll likely have to pay the agent a fee anyway, you might as well call her with the good news and have her handle all the paperwork and shepherd the deal through the closing process.Q. How many bedrooms are in a typical home?A. Three, according to the U.S. Census Bureau. About 57 percent of American homes that are occupied by their owners (rather than renters) have a trio of bedrooms. Only 2.3 percent have one bedroom or none at all.The bureau reports some other interesting facts about the homes that we live in. Only 7 percent of Americans live in a property with less than 1,000 square feet, while 14 percent enjoy at least 3,000 square feet. The rest of the homes are in between.While 68 percent of Americans enjoy forced-air heat, 13 percent use electric heat pumps and 1 percent still use old-fashioned coal- or wood-burning stoves to stay warm. About 20 percent of U.S. residents live in communities with between 2,500 and 20,000 people. Yet, there are more people (5 percent) living in towns with fewer than 2,500 citizens than there are living in "big cities" (3.8 percent).A remarkable 32 percent of owners are in the enviable position of having their home loans completely paid off. The rest of us have an average of 23 years of payments to go!bull; For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960#169; 2010, Cowles Syndicate Inc.