Craig Berry

The Mortgage Reports Contributor

How long does it take to improve a credit score?

Negative credit history — late payments, judgments, foreclosures, charge-offs, bankruptcies and collections — can stay on your credit report for seven to ten years. But you can improve credit score values fairly quickly.

  1. Most derogatory items come off within seven years
  2. Bankruptcies can stay on for up to ten years
  3. Employers and insurers may be able to see negative events even after they age out of your credit history

Fortunately, the effect of these events on your credit score lessens every month. Replacing bad history with on-time payments and good debt management can help raise your credit score in much less time.

What do the seven-year and 10-year marks mean?

Positive information on your credit report can stay on your credit history indefinitely. Accounts that were paid as agreed upon, but hasn’t been active for 10 years, are likely to drop off after year 10.

Late payments may hang around for up to 7 years. Most negative items simply drop off your credit report after seven years. The seven-year mark does not erase the actual debt, however, if it’s unpaid. You still owe the money.

Creditors, lenders and debt collectors can still go through appropriate legal channels to collect debt from you. These entities can call you, send you letters, and even garnish your wages if granted permission by the courts. It’s possible that you could even be sued for unpaid debts.

What about collections, judgments and charge-offs?

Collection accounts can stay on your credit report for 7 years plus 180 days from the date of the delinquency that immediately preceded the collection activity.

What many people don’t realize, is that even after you’ve paid the collection account, it can still stay on your report for that 7-year plus 180 days period.

Unfortunately, frustrating folks trying to “make good” by paying off collections, some credit scoring models do not give you credit for repaying collection accounts. Many do, however.

Another consideration is that derogatory accounts count less as they age. For this reason, experts often recommend that you do not pay a very old collection account because that makes the account a “new” derogatory item.

Tip: You may be able to improve credit score ratings by negotiating with collection agencies that they remove the negative account once it’s been paid. Be sure to get this in writing so that you can use it if and when you need to dispute the account with the credit bureaus.

Bankruptcies and other public records

Depending on the type of public record, most will stay on your credit report for seven to 10 years.

Bankruptcies, for example, generally vary according to whether it was a Chapter 7 (a liquidation in which your eligible debts are completely discharged)or a Chapter 13 (a reorganization in which you make payments to your creditors, usually for five years, before any remaining balances are zeroed).

All bankruptcies may report for 10 years from the filing date, though discharged chapter 13 bankruptcies usually stick around for seven years.

How to improve credit score with negative information

Since payment history is the largest factor of a credit score, derogatory credit reporting can wreak havoc on your scores. Fortunately, a few late payments won’t automatically kill your FICO if you have a decent overall good credit history.

Having an overall good credit file can help offset a few payment missteps.

Keeping your credit utilization low is key. Create as much space between your balances and your high limits on your revolving debts as possible. (Try to keep usage under 30 percent of available credit.) Having a good mix of revolving credit and installment loans such as auto or mortgage can also help.

Be sure to alert your creditor if you know you’ll be late making your next payment. Some creditors will allow a one-time payment amnesty. Yours may be willing to if you have a good relationship and track record with them.

Pay your bills on time

It may sound obvious, but there’s no better thing you can do to counteract those late payments or negative items than to immediately start paying on-time. You’d be surprised how quickly on-time payments can outweigh the bad stuff. Then, it’s just a matter of hanging in there. The older the late incident gets, the more your scores will improve.

Late payments and negative information can hurt your credit scores, but as long as you’re diligent about getting and staying current, your credit score will recover sooner than you think.

–Verify your new rate (Jun 14th, 2018)


Craig Berry

The Mortgage Reports Contributor

With 17 years in mortgage banking, Craig Berry has helped thousands achieve their home ownership goals. Connect with Craig on Twitter or Facebook.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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