Definition
Account condition, or account status refers to the current standing of a credit account. It explains any deviation from an on-time payment being made, whether the account is still active and how the account was closed if it is no longer active.
Analysis
The status of the account is one of the primary factors in FICO-based credit scoring models. Fair Isaac reveals that 35% of your credit score is composed of your payment history. How much of this history is devoted to prior history as opposed to current payment status is unknown.
One substantial update found in the FICO 08 scoring models has to do with single late payments of 30 days. In previous scoring models, just one 30 day delinquency would have a substantial impact on your credit scores, possibly dropping them as much as 50 points.
FICO 08 recognizes that a number of factors can contribute to a 30 day delinquency, of which many do not necessarily indicate a risk of nonpayment. Lost statements, family emergencies and even due date fluctuations can cause a cardholder to post a late payment.
Still, account condition is important, as it reveals what the current credit situation entails. A debtor that is late can improve their score the most by bringing any delinquent accounts current.
Accounts that are closed and have a negative status associated with them will cease to affect your credit score after 7 years from the date of last activity. If the account has since been restored to current status, it could revert to a positive account status once the delinquency is more than 7 years old.
