Will my score go up?

[Janice]

My credit score is not good (to say the least). I have an old bankruptcy from 10 years ago and several medical bills that went to collection about 6 years ago.

Will my score go up (and just how much) when these negative items drop off my report in a year or so?

Thank you

[Tracy Winters]

Not by much, if any at all…

You need to know that if your creditors (the collection agencies in your case) go to court and get a judgment against you – then the debts don’t fall off. Instead, the judgments remain on your credit report until they’re paid or until the day you die (and then your estate must pay them). Creditors almost always get a court judgment if the debt is a substantial amount.

Collection agencies tend to sue just before the statue of limitation, which in many states is six years. Since you say that your collection items are around six years old, they may still go after you and win.

To answer your question, incase that they don’t get judgments or simply don’t file law suits, the individual derogatory items will age off your report after 7.5 years, while the chapter 7 bankruptcy will age off 10 years from the date filed.

However, as for the expected credit score increase, I wouldn’t get my hope too high. Fico scores are based mostly on recent activity – 90% of your score is determined by the previous 2 years activity.

So the older an item, the less impact on your Fico score. By the time something drops off your report, it has very little effect on your score and you may not even notice a difference.

If your score is not so good as you state, it means that there are more recent problems, such as more recent delinquent accounts, high utilization ratio or simply lack of positive credit information.

To re-establish credit and improve your score, you need at least 24 months of consistent, timely payment history. If you do not have an open, active line of credit, get a credit card, even if you have to get a secured card. Use the card for regular purchases, wait for the statement, and pay the balance in full every month. This will build your credit and avoid interest.

[Author]

Posts