Credit Damage Scale
This is the credit rating damage scale in order of severity.
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Lower Severity Credit Damage
· Just between creditor and debtor
· No judicial system involvement
· Not of public record
1 – Missed & Late Payments (but still paying)
· Less than 30 days in default
· Minimal credit rating damage
· Easily fixable
· Most likely not reported in credit record if less than 30 days late
2 – Pre-Charge-Off Settlements
· Between 30 to 120 days in default
· Moderate credit rating damage
· Harder to fix
· Most likely already showing in credit report
3 – Charge-Offs
· Beyond 90 to 120 days in default
· Debt most likely sold to junk debt collectors or similar collection operations
· Hard but possible to fix
· Removable by agreement & credit repair
Higher Severity Credit Damage
· Judicial system involvement
· Of public record
4 – Law Suits & Judgments
· High chance of garnishment
5 – Evictions, Foreclosures, Liens & Repossessions
· Issue of most concern by lenders, and landlords
6 – Bankruptcy
NOTES:
· No legal advice provided
· Credit impact also affected by debt to income ratios
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