Whether you’re trying to improve your credit or maintain a great credit score, you probably wonder how different actions like missing a payment (hypothetically, of course) or paying down your balance will actually impact that three-digit number.
As you might have noticed, it’s tough to find specific details about how many points your score can gain or lose with certain credit actions. That’s because, according to a FICO representative, the credit scoring company steers clear of providing this sort of specific guidance for individuals, since scores are based on a plethora of factors that are rarely the same across a broad swath of consumers.
Even so, FICO created a few personas based on its analysis of select consumer credit profiles to model how credit scores could fluctuate based on certain events.
Your starting score matters
We took a look at the two models on each end of the spectrum ― someone with a very good credit score of 793 and another with a fair credit score of 607 ― to see how things like missing payments, maxing out credit cards and taking out new loans could affect those scores.
It turns out, the score you start with makes a big difference. Here’s a look at how your credit score can move up or down based on certain actions.
Miss a payment by 30 days
Very good credit: -63 to -83 points
Fair credit: -17 to -37 points
There are five main factors that are used to calculate your FICO credit score, and payment history is the most heavily weighted, at 35% of your total score. That means missing just one payment can have a pretty drastic impact.
But you’ll notice that the higher your score is to start with, the farther you have to fall. Someone with a lower credit score isn’t as affected by a missed payment because they’ve already mishandled credit in the past, so their score reflects the higher risk they present.
Either way, it’s clear that missing a payment is no good.
Miss a payment by 90 days
Very good credit: -113 to -133 points
Fair credit: -27 to -47 points
What happens if your payment is late by 90 days instead of 30 days? Though your score will take an even bigger hit, the good news is that the effects won’t be three times as bad.
But again, the better your credit, the worse the consequences. In this case, someone with good credit score of 793 could easily drop into the “fair” category by being this late on a bill.
Take out a $5,000 personal loan
Very good credit: -3 to -23 points
Fair credit: -17 to +3 points
Opening a new credit account affects several areas of your score: length of credit history (15% of score), new credit (10%) and credit mix (10%). Whether the impact is positive or negative, and by how much, depends on factors like the borrower’s existing credit history and debt.
As you can see, someone with very good credit can expect a fairly minimal drop in their score, likely due to a new hard inquiry on their report. However, by consistently paying down the loan with on-time payments, that borrower should expect their credit score to grow over time.
For someone with a lower score and thinner credit profile, the impact could go either way. Again, a hard inquiry and the addition of outstanding debt could cause a small drop, but a new loan could also help diversify their credit mix and give it a boost.
Max out your credit cards
Very good credit: -108 to -128 points
Fair credit: -27 to -47 points
After payment history, amounts owed is the second most heavily weighted credit score factor, at 30%. Revolving credit (namely, credit cards) are also weighted more heavily than installment loans. Experts generally recommend keeping your credit utilization ratio below 30%, and the lower, the better. High utilization is considered a red flag that you’re too reliant on credit to cover your expenses.
So, a person with good credit and low credit utilization who suddenly maxes out their cards can expect to see a 100-plus point drop in their score. A person with a lower score and higher utilization won’t see as big of a drop.
Pay down revolving credit by 25%
Very good credit: +2 to +22 points
Fair credit: +8 to +28 points
How about some good news? An example of a positive credit action that has an immediate impact is paying down existing debt, especially on revolving credit accounts. In FICO’s example, someone with fair credit who reduces their outstanding balance can see a slightly larger score increase than someone who has very good credit.
It’s important to remember that these numbers aren’t guarantees, but estimates based on FICO’s wealth of data. These examples can give you an idea of how your credit score might be affected by different actions, but the actual results will depend on your personal credit profile.
No matter your score, though, they should serve as encouragement to pay your bills on time and keep your debt to a minimum.