- Delinquencies (30- 180 days): A delinquency may remain on file for seven years; from the date of the initial missed payment.
- Collection Accounts: May remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked as a “paid collection” on the credit report.
- Charge-off Accounts: When a delinquent account is sent to a collections company. This will remain for seven ½ years – Six months in addition to the 7 years from the original delinquency date which is called DOFD (Date of First Delinquency).
- Closed Accounts: Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts continue to be reported for ten years from the closing date.
- Lost Credit Card: If there are no delinquencies, credit cards reported as lost will continue to be listed for two years from the date the creditor is contacted. Delinquent payments that occurred before the card was lost are reported for seven years.
- Bankruptcy: Chapters 7, 11, and 12 will remain on one’s credit report for ten years from the filing date. Chapter 13 bankruptcy is reporting for seven years from the date of the payments finishing not the filing date. So, date of discharge on Chapter 13 which is when everything is completed. Example: 3-year payment plan; seven years doesn’t start until the end of that payment plan.
- Judgements and liens no longer report to the credit report as of 2017.
- Inquiries: All inquiries listed on one’s credit report must come off after two years.
What is a Credit Score?
A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. Therefore, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card.
What affects your credit score?
Pay all your bills on time, every time. This includes mortgage, auto payments, installments loans and all your revolving lines of credit like credit cards.
Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here.
You can get your free annual reports, but they do not have scores.
Never go above 30% on your credit limit. Example: Credit limit is $10K; never go above $3K
Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, and then pay it off. How long each of your accounts have been active is a major factor in your credit score.
In addition to starting the credit dispute process with you, what can I do to help raise my credit score?
Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards.
Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here.
Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority. Do use your credit cards – Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home.
Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, and then pay it off. How long each of your accounts have been active is a major factor in your credit score.
Remember that this all takes time – Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Repairing your credit score does not happen overnight; so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.
How long will certain items remain on my credit file?
Information that cannot be in a credit report:
- Medical information (unless you provide consent)
- Notice of bankruptcy (Chapter 11) more than ten years old
- Debts (including delinquent child support payments) more than seven years old
- Age, marital status, or race (if requested from a current or prospective employer)
FAQs
What is a credit score?
A credit score is a 3-digit number created by an algorithm by a company such as FICO and Vantage to measure your credit worthiness and the risk in lending to you. Creditors and lenders use this credit score to make the decision on whether to open a line of credit with you.
What is the average length of time it takes to repair your credit?
Every credit report is unique, just like a fingerprint, so we can’t perfectly predict how long it will take sometimes we see 10 removals, sometimes we see 1 removal, sometimes everything gets removes and sometimes nothing gets removed and we must resort to using credit building techniques to help you rebuild your credit.
What is considered good credit?
A good credit score range is 680 – 699. We like to see our clients reach over 700 with the top 3 credit bureaus.
What can you do to help increase credit quickly?
Stop applying for credit. Do not close any accounts. Pay your credit cards down to below 30% of the available credit line, even if you pay the balance off in full each month. Pay your bills on time.
Can student loans be removed from credit scores?
Yes, student loans can be removed from a client’s credit report. Even though they are removed from credit reports there still in a system called caivrs. So still need to be taken care of through a default resolution program before applying for any federal loans such as an FHA loan or a USDA loan.
What are some tools and/or apps used for budgeting?
Mint
PocketGuard
You Need a Budget
Wally
Goodbudget
Why is it important to have a good credit score?
Your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially and/or give you better rates when you apply for a loan. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide whether you can be trusted in a high-responsibility job that requires you to handle money.
Can I do this on my own?
Yes! Of course, you can do it on your own. But if you find yourself overwhelm, much as a mom who finds herself overwhelmed cleaning her home and hires a cleaning company; we are here to help!
What is a debt settlement?
When you effectively agree with a creditor to pay back a portion of the loan balance; allowing the balance of the debt to be forgiven. Make sure to get the agreement in writing before actually paying off the settlement.
What if I have more questions?
Visit our Facebook group (Credit Score Improvement) to have access to other questions being answered. This group is committed to help clients get out of the Credit Hole to Be Whole!
CREDIT ISSUES? WE PROVIDE HOPE!
We use the power of the law to challenge negative, incorrect, erroneous and outdated information on your report that are lowering your score
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