Credit Card Problems and Your FICO Score | CreditShout

Credit Card Problems and Your FICO Score

By Kevin / September 16, 2010

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So you’re having a few issues with your credit cards. But hey – a few little problems won’t drastically affect your creditworthiness, right?

Don’t be so sure.

FICO has released some estimates pertaining to how much credit scores are affected by certain “bad credit” events. Your FICO score is a three-digit ranking between 300 and 850 (above 700 is generally considered “good”) which affects the interest rates and/or availablity of credit that you can receive from credit card companies, lenders, or banks.

According to FICO, some seemingly innocuous occurrences can have a substantial effect on your credit score.

  • If you max out a credit card, your FICO score could drop by between 1.5% and 5.75%.
  • If you make a credit card payment at least 30 days late, your FICO score could drop by between 8.5% and 14%.
  • If you accept a debt settlement instead of paying your credit card balance in full, your FICO score could drop by between 6.5% and 18.5%.

So if you have a credit score of 730 and you max out a credit card, a 5% drop would be enough to push you out of the “good credit” category. This should illustrate how important it is to stay under your credit limit and make your payments on time.

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