Your Credit Record
 by Debra McCann


Credit Reports

  • Positive open and closed accounts can remain on your record indefinitely.

  • Late payments remain on your credit report for two years. Deliquent accounts that are charged off remain on your credit report for seven years.
  • Accounts sent to collections will remain on your credit report for seven years from the date of the original missed payment. The record will be marked as paid collection on your report when you pay the full balance.

  • Most judgements including small claims, civil and child support remain on your credit report for seven years from the filing date.

  • Bankrupcies remain on your credit report for ten years from the filing date. When you file for bankcrupcy all of the included accounts should be marked included in BK and each will remain on your report for seven years.

  • Unpaid city, county, state and federal tax liens can remain on your credit report indefinitely, although paid tax liens remain on your credit report for seven years from the paid date.

  • Inquiries remain on your credit for two years, although FICO scores only consider inquiries from the past twelve months.


FICO Scores
About 30 individual factors are used to determine your FICO score. These can be categorized in five areas.

  • 35% Payment History
    Do you pay your bills on time? Do you have any overdue accounts, collections or charge-offs on your report? Does your credit report contain negative public records, such as a bankruptcy, lien, or judgment?

  • 30% Amounts Owed
    How many outstanding balances appear on the credit report? What is the ratio of total balances to total credit limits on revolving debt such as credit cards?

  • 15% Length of Credit History
    How long have you had your oldest account? What is the average age of all your accounts?

  • 10% New Credit
    How many recent inquiries for new accounts does your report show? How many new accounts do you have?

  • 10% Types of Credit Used
    How many major credit card accounts do you currently have? Do you have a variety of other types of open accounts, such as installment loans, department store cards or gas cards?





Improving Your Credit

Improve Your Payment History
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

Keep Debts to a Minimum
Keep your balances below 10% and you will see a significant increase in your credit score. Learn when the cutoff date is for creditors to report to the credit reporting agencies and pay your balance before this date if you want the results to show on the following months credit report. A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Request that your limit be raised, but don't use the available credit.

Length of Your Credit History
Don't open a number of new credit cards that you don't need, just to increase your available credit. If you have been managing credit for a short time, don't open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a large effect on your score. Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.


Credit Agencies

Useful Websites