Late Car Payments & Credit Scores
Study shows the relationship b/t car payments and credit scores…
A recent Experian national study shows how much making one late car payment can hurt your credit score. The average credit score of an American consumer who makes their car payment on-time is 703– nearly 100 points higher than the consumer who makes just one late auto payment whose average score is 605. The news only gets worse when a payment is 90 days late or more with the average score dropping to 580.
Nationwide, 28% of the U.S. population has at least one auto loan with an average balance of $15,654 and an average monthly payment of $429. The index also showed that 12% of consumers have at least one late car payment on file.
The figures vary from state to state. For instance Texas, with the highest monthly auto payment of $570, has the lowest average score of 592 for consumers with one late car payment. Consumers in Massachusetts had the highest average score of those with at least one late auto payment: 623. On the flip side are the consumers of New Hampshire and Minnesota who have the highest average overall score of 728 with no late car payments.
Steven Katz, spokesman for Chicago-based TransUnion’s TrueCredit.com, said depending on an individual’s circumstances, a late payment could drop a person’s score from 25 to 75 points. “A missing payment is probably the number one thing that you don’t want to do regarding your credit,” Katz said. “You want to make sure you have on-time payments. That is the major, major factor in calculating your score.”
