What Happens to a Credit Score When Items Are Deleted?

Your credit score is based directly on your credit report information. Positive and negative data in your reports are plugged into the scoring formula to determine the three-digit number that represents the likelihood that you will repay your accounts. The score fluctuates as the three credit reporting bureaus -- Experian, Equifax and TransUnion -- continually update your reports by adding new data and deleting items for various reasons.

Deletion Reasons

The credit bureaus erase credit report information when the allowable reporting time expires. Bankruptcies are deleted in 10 years, while most other harmful information, from late payments to collection accounts and judgments, is eliminated in seven years, according to Diane Moogalian of Equifax. Open accounts remain on your credit reports, but closed accounts with positive status are usually deleted within 10 years. The bureaus also must delete disputed entries if the companies that provided the data cannot verify it within 30 days after receiving a consumer complaint.

Deletion Effects

Old accounts that were in good standing when they were closed lose their positive credit score effects over time because of the lack of activity. By the time they are finally deleted, they no longer have much effect on your score. Old negative items have some effect until they are erased, so your score may go up slightly once they are erased. Deletion of recent negative information can raise your score significantly, depending on what gets erased. For example, the MyFICO scoring site identifies late payments, collection accounts and judgments as heavily weighed items, so their deletion is very helpful to your score.

Negotiating Deletions

You can sometimes negotiate deletion of negative items before their reporting period ends. Your score goes up when bills written off as bad debt and collection agency accounts get removed. Call your creditor or the debt collector, offer a partial or full lump sum settlement and explain that the account must be completely deleted from your credit reports in exchange for the payment. To ensure the creditor or collection agency complies, get the agreement in writing, Bankrate columnist Steve Bucci explains.

Considerations

The credit bureaus are supposed to automatically delete outdated items and unverified data involved in disputes, but sometimes they remain on your reports. Experian, Equifax and TransUnion must provide you free copies of your credit report after processing disputes so you can verify that the appropriate items are gone. You can obtain a free copy of your credit reports once a year through AnnualCreditReport.com to check whether items scheduled for deletion have been erased. This site is run by the bureaus to comply with federal law, the Federal Trade Commission explains. You should dispute any outdated information you find in your files.