FICO Reveals How Many Points Debt Really Costs

Quick Post: New Info On How Debt Effects Credit

The exact method of determining credit scores is a closely guarded trade secret. So it is rather surprising that FICO has released this information.  It doesn’t tell us everything, but it does help us understand how much of an impact debt can have on credit scores.

The New Info

	Effect on a 680 score	Effect on a 780 score
Maxed out card	-10 to -30	-25 to -45
30 day late payment	-60 to -80	-90 to -110
Debt Settlement	-45 to -65	-105 to -125
Foreclosure	-85 to -105	-140 to -160
Bankruptcy	-130 to -150	-220 to -240

What We Already Know:

Payment history – 35%

Amounts owed ( amount owed in proportion to total credit limit) – 30%

Length of credit history – 15%

New credit ( recent inquiries and newly opened accounts) – 10%

Types of credit used (revolving, installment, or consumer finance) – 10%

Source: FICO

Another instance that FICO revealed some rather controversial info was during July 1999.  They stated that the type of occupation, such as professional or blue collar, was a factor of up to 50 points (FICO Presentation).  However, on FICO’s website it clearly states that occupation is not scored (FICO scoring).

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