Credit History & Mortgage Problems

If you're unable to make your mortgage payment on time every month it will mar your credit score because payment history is the biggest factor in determining your credit score, according to the Fair Isaac Corp. The National Association of Realtors reports that late mortgage payments will decrease your score more than late credit card or car payments.

Basics

Before you bought your house, your lender determined how much mortgage you could afford and your interest rate, in part, by using your credit score. Payment history, which shows your ability to pay bills on time, makes up 35 percent of your total score, so paying the mortgage on time is crucial, according to Fair Isaac Corp. A late car or credit card payment will decrease your credit score, but The National Association of Realtors said credit agencies like Vantage will knock at least 100 more points off your score if you miss a house payment.

Duration

The longer you are unable to pay, the more it damages your credit history. In the "payment history" section of your credit report, you'll see late payments categorized -- by 30, 60, 90, 120 or 150 days or more late. Experian reports many loan modification programs aren't available until you're delinquent by at least 90 days. By this time, your credit has been severely damaged.

Implications

In 2011, Fair Isaac Corp. studied three people -- all with solid scores of 680, 720 and 780 -- and followed how their late payments impacted their scores in various stages of delinquency -- 30 days, 90 days, short sale, foreclosure and bankruptcy. After 30 days, the 680 score slid to 600 to 620, while the 780 fell to 670 to 690. At 90 days late, the 680 score remained the same, but the 780 dropped at least another 20 points. By the time the former 680 credit holder entered into short sale, foreclosure and bankruptcy, scores had dropped to 575 to 595 and 530 to 550 respectively, while the former 780 score plummeted to 620 to 640 and 540 to 560 respectively (scores were the same for short sale and foreclosure).

Recovery

After being late on the house payment by 30 days, it's estimated it will take nine months for a person with a 680 score before the delinquency to fully recover that score again. It will take three years to recover if your score was 100 points higher to begin with. FICO's findings become even more dramatic when serious delinquency is considered; to recover the original 680 score after a bankruptcy, it will take five years, while a person who formerly had a 780 score will need seven years to a decade to recover that score.