How Far Back Do Credit History Reports Go?
When it comes to applying for credit, it is important to know how far back lenders look on credit history reports. Just because potential customers have paid all of their bills on time in the past 2 years does not mean that they will get approved for credit. Yes, it is true that credit reports show payment history for the past few years, but reported late payments can remain on credit history reports for several years; this information becomes apparent when customers learn that their credit score is not what they expected. Knowing what information is on a credit history report is the only way to maintain a good credit history.
Information remains on annual credit reports as follows: inquiries – 2 years, late payments – 7 years, paid tax liens – 7 years, unpaid tax liens – 15 years, collection accounts – 7 years, judgments – 7 years, and bankruptcies – 7 to 10 years. The information may surprise many people, but it’s true. Depending on the creditor, information may remain on credit reports for less than the specified time. Some creditors remove the information after the accounts are paid in full so that their customers can begin rebuilding their credit.
Pay bills on or before the scheduled payment date. Lenders do not always hold payment history issues against potential customers. They may consider your current payment history. For example, paying all bills on time for 2 or 3 years may make it possible to receive credit and improve credit.
Request removal of old information reported to credit bureaus. Some lenders are likely to remove the information as soon as the debts are repaid. They have the right to remove negative information related to accounts after the accounts are clear. Late payments usually remain, but whatever information can be removed from credit history reports is good.
Apply for credit with a small credit line. Part of the reason for past credit issues may have been the misuse of credit. Applying for credit in small amounts may help rebuild credit and helps consumers use credit responsibly. Applying for a credit card or a personal loan may prove to be a great decision that can help to build credit.
Find a professional to help rebuild credit. A credit specialist can help their customers rebuild their credit quickly. In addition to offering ways to pay off debt quickly, they can also provide helpful tips to help maintain current good credit standings. These professionals know about credit laws and customers rights so they will ensure that their customers make the right decisions.
Do not use credit cards more than necessary. Credit cards with less than 30% of available credit help customers maintain a good credit score. High debt and maxed out credit cards lower credit scores very quickly, but paying them off can raise scores quickly.
No one wants to deal with the frustration of payment issues remaining on credit history reports. The best way to handle the problem is to control the future by finding ways to rebuild credit and raise credit scores. In time, consumers may be able to receive credit.