To everyone that has no idea about credit and how it affects your credit history. I am a credit specialist at a mortgage company. I see many types of credit. Your credit score is built on an algorithm that the Fair Isaac Corporation has devised many years ago. If you were to call they wouldn't even be able to answer your questions on the mathematical equation. It is kept tightly sealed. Anyway, when I do a credit analysis many people make the same mistakes. The first mistake is they never ever tell the creditors that their income is higher than first reported. Second, they never or very rarely ask for an increase in their credit limits on their cards. But never carry a high balance on the cards. Credit limits should be raised every 6-8 months. You never want to max out the cards. Also, never cancel a credit card less than 24 months. Lenders want to see a 24-month history. Cards with less than 24 months are considered new and will not allow your score to improve.

The myth about derogatory and collection accounts staying on for 7 years. I have been very successful in removing about 75% of those questionable credit trade lines. The important part is to challenge all that is in collections and is charged off. The credit reporting companies (Experian, Equifax, & Trans Union) have to send out to those companies on your credit files a verification card. Many companies are too busy to send it back. They have 30 days to respond. If there is no response it must be removed. Once removed it can no longer appear on your credit history. If it does reappear on your history then you can dispute that with the reporting company showing they removed it once before.

Items on your credit history that are 7 years or older must be removed. Companies can no longer collect for it. If they try then you have a good lawsuit. This is called a statute of limitations. All this can be found under the Fair Credit Reporting Act. When collection agencies purchase a debt that is about to turn 7 years old they will resell it to other collection agencies that will report it on your credit history. This is how the debt remains on the credit history. Credit reporting companies remove debt 7 years after it is reported. I dispute the debt from the first time it appears on the history and inform the reporting company it is the same old debt that was already removed. It is really illegal for the collection agencies to do that but it is done. Also, if you get calls from collectors don't verify the debt. Tell them that person is not you and that they have that persons old number or whatever but never verify it is you.

If you have recent debt (within the last 2 years), I would pay those off. This would get your credit scores higher. My clients have obtained higher scores of more than 20 points after I was finished with their credit analysis. If you have any judgments on your credit history this will remain on there for 8-10 years. I have had those removed too. It depends on the court. You never want to go to a Consumer Credit Counseling Service. STAY AWAY FROM THEM!! Don't listen to the ads. Its all lies. Lenders look at these companies like as if you filed a chapter 13 bankruptcy. Also, these companies, for the most part, never pay your bills on time. On your credit history it will reflect late and slow pay. If you need a method for paying your bills contact me. I will show you how. Any questions?