Your credit score is a number used by lenders to determine the credit risk you present. A high credit score increases your chances of approval and improves your chances of receiving a lower interest rate on loans. Credit scores are determined based on information from your credit report, including payment history, public records (such as bankruptcy) and inquiries into your credit report. While positive information may remain on your report forever, negative information often may be removed.
Permanent Information
Criminal convictions may be reported on your credit report and remain there permanently. Any credit information reported as a result of application for employment with more than a $75,000 per year salary or an application for credit or life insurance valued at $150,000 or more may also remain on your report and affect your score indefinitely.
Bankruptcy
Bankruptcy remains on your credit report for 10 years after filing. Although accounts will show they were discharged or included in bankruptcy, check your credit report to ensure the account balance has been changed to $0 following bankruptcy and that the creditor is not still reporting late payments on the account.
Late Payments and Other Negative Information
Other negative information remains on your credit report for seven years. This includes late payments, charge-offs, defaulted student loans, judgments and tax liens. According to Bankrate, if the tax lien is unpaid, it can remain on your report for up to 15 years.
Other Negative Information
Other items on your credit report that may negatively affect your credit score include having a high debt-to-credit ratio (carrying a large amount of debt relative to your credit limit) and late payments. Paying down debt and having more available credit will help to raise your score. Although late payments will remain on your report for seven years, getting current on any past due accounts will immediately improve your score.
Disputes
Dispute any information on your credit report that is inaccurate or does not belong to you. In addition, dispute any items not removed from your credit report after the time limit has been reached. Creditors do not necessarily report information to all three credit bureaus -- Experian, Equifax and TransUnion -- so check all three of your reports to ensure that all three reports are accurate and all three credit scores are a high as possible. You can obtain a free copy of your credit reports once each year through AnnualCreditReport.com.
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