Can I Start Over With a New Credit Score?

Illegitimate credit repair companies often claim that a consumer can get a new credit profile or start over with a new credit score. Beware of these scams, the Federal Trade Commission warns. You can start over your credit history, but this takes many years. Adding new, positive information is a far quicker and legal way to get a new credit score.

Misconception

If you have terrible credit, you must rebuild your credit history not your credit score. Credit scores come from data in your credit file. You can have dozens of different scores, but only three credit histories -- one from each of the three major bureaus, TransUnion, Equifax and Experian, which are used almost exclusively by lenders for credit reporting. While most lenders only use the Fair Isaac risk model, Experian estimates that as many as 1,000 different models are in use, such as formulas derived from a lender's own research.

Warning

You cannot hit a restart button on your credit history regardless of the claim of a credit repair company. Once a creditor reports negative data to the credit reporting bureaus, they list it as long as federal law legally allows. Starting a new credit history is a felony, called "file segregation," according to the Federal Trade Commission. One frequent file segregation tactic is to use a taxpayer ID instead of a Social Security number. Creditors will likely catch on to the fraud eventually and may report the case to your state's attorney general.

Starting a New Credit History

You can start a new credit history legally by waiting out any negative data on your report. The length of time the credit bureaus can report negative data ranges from two years for credit inquiries to 10 years with bankruptcy. Only in the case of unpaid tax liens can the credit agencies report data indefinitely and Experian only reports unpaid tax liens for 15 years.

Tip

Rather than trying to game the system or wait for a fresh start, start using credit responsibly. You can recover from just about any negative data within two to four years, because new positive data is more important than older negatives and it mitigates some of the lost points. Get new positive data by opening a secured credit card account and always paying on time. A new account that has never been late will add points to your score while you wait for the bureaus to stop reporting the old, bad data.