Credit scores are a like a stream of water--fluid and ever changing. Throw a big rock in it and you will see a big splash. When negative information hits a credit report, it can be a huge wave or a small ripple. What is certain is that your score will drop immediately if you have new negative data.
Identification
You usually do not see a decrease at all in your credit score unless you miss a payment or apply for credit. If a negative item or account hits your report, the score decrease will be immediate, because the FICO score is biased toward negative data. A single missed payment, for instance, drops your score 40 to 110 points if you have average credit, according to Les Christie of CNN Money.
Lag Time
Once you mishandle an account, negative data does not appear on your credit report immediately. The credit bureaus have billions of pieces of information to add to their databases each year, so it can take up to 90 days to change your report, but updates usually happen in as little as 30 days, according to Bills.com.
Considerations
Negative items have the most impact the first day they appear on your credit history. With each passing day, the importance of negative data lessens. After two or three years, old incidents are far less important than fresh ones, and some lenders might not consider any history older than two or three years. Thus it usually takes no more than four years to recover from even the most serious incident, such as filing bankruptcy, according to Liz Weston of MSN Money Central.
Tip
Check your credit reports frequently, and if possible, run your credit score, too. If you see a consistent decrease in your credit score, review your accounts for potential delinquencies or negative accounts that do not belong to you. As long as you pay bills on time and do not rack up debt, your credit score should increase. Some of the most common problems that cause a decrease are maxing out a credit limit and falling behind on monthly debt payments.
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