The information contained on your credit report is both negative and positive data that is provided by your creditors and is reflective of how you manage credit. Ideally, your credit report and subsequently calculated score give lenders an idea of how responsible you are with financial obligations and both are used by lenders to make decisions about loans and other lines of credit.

Traditionally on credit reports, negative information such as late payments, missed payments, or other violations of the creditor terms and conditions will stay on a credit report for a period of seven years once the account is no longer active, unless a bankruptcy is involved. Bankruptcy related information generally will remain on a credit report longer, for up to 10 years.

When attempting to repair one’s credit, consumers will work to negotiate with creditors directly or will employ a third-party service to increase credit scores and eliminate outstanding debts. Most will be proactive to improve their credit scores especially when they know they need financing in the immediate future. But for some consumers, waiting is their best defense.

Why Bother Waiting?

Some consumers with poor credit histories simply choose to do nothing at all. Those that do not foresee the need for a mortgage, personal loans, or auto loans will just let their credit history sit without doing much to improve the scores. After the seven year period passes, the negative information on accounts will be taken off a credit report. Because of the factors that influence the calculation of a consumer’s credit score, this dropping off of information from a credit report actually does work to the advantage of the consumer. Since negative information has been deleted, credit score calculations no longer factor in that data and provided the consumer has been paying bills on time and not overextending credit, a credit score can actually increase rather quickly as more data is deleted.

Is It Worth It?

While waiting seven years to improve your credit score is not highly recommended, it is possible to see improved scores as more time passes as long as no additional new negative information has been added. However, consumers need to understand the consequences of waiting 7-10 years for credit to improve.

Today, more and more entities are using credit histories and scores to determine pricing on services they provide. For instance, a low credit score will mean you pay more in auto and homeowner insurance premiums than the average consumer. You may also be denied renting an apartment or a new job based on your credit profile. You may not need to secure a mortgage or other kinds of financing for years to come but you should not just leave your credit score hanging in the balance. You should get proactive about credit repair as soon as possible.

Working for Improvement

It is highly recommended that all consumers become proactive about repairing their credit and increasing their scores at all times. Tackling credit repair on your own is certainly not impossible and all consumers have the power and the right to do it for free. Start by contacting the credit reporting bureaus for a copy of your credit report and score so you know exactly which creditors are reporting data on you. Settle debts with creditors by paying the balance in full, paying installments, or otherwise settling the debt for less. Be sure also to check back in with your credit report to ensure appropriate changes have been made and all errors have been disputed and corrected.

Accurate data and paying bills on time each month are two essential components of effective credit repair. It certainly is not possible to boost your credit score overnight as it can be a long process but consumers can definitely reap the benefits of actively working to better their credit profile in a much shorter period of time than waiting seven years.

Ed O’Brien is an expert on personal finance, specializing in credit repair. His blog, Credit Repair, offers free advice on preparing yourself for a financially responsible future.

Suffice it to say, anyone who reads this blog knows how much I abhor the concept of what I call worthless credit scores. I hate these things so much that I can’t even think of the right words to use. However, there are a number of people who really do care about this, especially those with the money that look for reasons not to give any to someone else.

CNN Money had a story recently called 5 Credit Score Killers, which of course means they gave 5 things to watch out for. I’m going to comment on those 5 things here; follow the link to see what they had to say.

This is usually bad news all around because even companies need their money to pay their bills just like we do. However, I think there should always be at least 7 days of grace, or 5 business days, though one might not need it as often anymore. Credit card bills now have to give you 21 days from the day you should be receiving it in the mail, and that wasn’t always the case. Still, it’s not something you want to get in the habit of doing.

This one is kind of ridiculous because you just can’t win. If you have a $5,000 credit card, supposedly the best scenario is to carry a balance of around $500 at all times. You’re not even supposed to pay off your card, because now you have credit you’re not using showing up on your report, which is also a negative thing.

In another post I wrote called Should I Cancel That Old Credit Card, I touched upon this one, saying that if you’re not using your credit card that you should be allowed to cancel it if you want to without penalty. After all, what you’re left with is a credit card laying around your house, waiting for someone else to steal it from you. Or worse yet, someone learning enough information about that card through other measures, then using it to ruin your credit in another way. The more credit you have out there, the more opportunities for identity fraud; not being allowed to cancel because of some stupid credit score isn’t fair.

Here’s the counter of the other one, and it proves that you can’t win for trying. Supposedly, every time you try to get credit for anything it hits your credit score and counts as a negative. If you get turned down, it hurts you even more. What the heck is that? How fair is that?

This one I don’t blame anyone for. If you decide you’re just not going to pay on money you’ve borrowed in any way, you deserve whatever you get. However, what you’ll find is that most creditors will try to work with you if you don’t have the money or don’t have all the money you’re supposed to pay on that specific date. In today’s economy, many are willing to get what they can, knowing it’s a tough market with high unemployment and the like. Never be afraid to call your creditors to ask for help; you’ll probably be pleasantly surprised what you’ll find.

There was a story on MSNBC.com today regarding what’s coming as it pertains to credit cards, and none of it is good news. Some of what the story talks about I’ve addressed here in different stories, while some things are new. In essence, he has six points, which I’m going to list here, and I hope you go read the story to get the rest of it on your own:

1) More cards with annual fees

6) Futzing with rewards

So there you are, this big news story, and, like many online newspapers these days, they allow commentary on the news stories. And the first commentary just stuck in my craw:

“DO NOT!!!!! Repeat: DO NOT!!!!!! Cancel credit cards. Pay them off but don’t cancel them. Doing so will drop your credit score.”

I’m sorry, but it’s about time someone addressed this thing about credit scores and why so many people are scared about them falling. If you follow this blog, you know that not only am I not scared of a bad credit score, but I really believe that credit scores are worthless (and how nice it was to find out that I’m #1 on Google for the search term “credit scores worthless” and #3 for the search term “worthless credit scores). what is it about credit scores that seems to scare so many people? Let’s look at this point by point.

1. People worry that a bad credit score will keep them from getting new credit. That may or may not be true. It really depends on what you want credit for. The truth of the matter is that if you can afford to buy things you really should be looking for new credit anyway. If you are looking to buy a house, you should be trying to put away as much money as you can so that you can afford a nice down payment. A bad credit score means almost nothing if you have a nice down payment of at least 25% or more. If you have a bad credit score and you know it (if you’re getting your annual free credit report you should know it), then you should know better than to be trying to get a new credit card in first place. Even so, you can probably still get a credit card. True, the industry might be higher, but interest rates are going up anyway and they’re going to pick on people whether you have good credit or not.

2. People worry that a bad credit score will keep them from getting a new job. There are certain jobs for that might be true, but the overwhelming majority of positions that are out there in the world are looking at credit scores at all. If you have great qualifications, even those jobs that check credit scores are probably going to hire you anyway. What those employers are looking for when they look for credit scores are any indication that recent death of gotten so far out of hand that you might possibly be thinking about doing something criminal. And by the way, these employers look to get your credit report, it’ll see a credit score anyway, so that doesn’t matter at all.

3. People worry that a bad credit score will keep them from getting a new apartment. I pretty much addressed that in number one and two. If you have enough money for a down payment most apartment complexes are even going to check your credit report. And, credit scores on credit reports anyway so you still don’t have anything to worry about as regards your credit score. Now, if your credit report looks bad the might have something to deal with.

4. People worry that a bad credit score is an indictment against the type of person that they are. Very few people care what your credit scores. True, a bank might care about your credit score if you trying to get a loan from them of some fashion, he might have some difficulties with some car dealerships trying to get a brand new car if your credit score is pretty bad. The truth is you will still get a car, even if the interest rate is higher, but the more money you can put toward your car the last interest rate is going to be. Banks are a different story, especially after the fiasco the housing market caused in many states, and I’ll think anyone really wants to follow banks are being a little more cautious with how they’re loaning out their money. Here’s a couple of things you may not know.

One, you have more than one credit score. There are three credit reporting agencies, and each one has a different credit score. That’s because they all have different criteria for what they report, and sometimes, if you get all three credit reports, you’ll see something on one that’s not on other and that will affect your credit score.

Two, at least have to credit reports out there or wrong in some fashion. I’ve seen my name misspelled, addresses totally wrong, cards that show as open when they were paid off and closed years ago, wrong employers, and wrong addresses for that employers. When you know what people are looking at, and you do this when you’re getting credit reports on your own, you know beforehand what’s going on in your credit report and you should get any errors fixed that might affect your financial standing.

All in all, the way people obtain credit has already changed, and it’s probably never going back to the days we were all used to when we used to receive 14 to 20 credit card offers a day in the mail. I know, I’m exaggerating, but it certainly felt that way. People who supposedly have good credit scores these days are finding it hard to get some banks to give them loans for homes. If someone with a credit score of 750, which is considered really good, can’t get a loan and why is anyone else worried about their credit score? you know what supersedes a credit score?

Cash! If you don’t want to worry about credit scores or credit reports, learn how to budget your money and start putting money away for purchases of things that you want. If you can build your bank account, you’ll find that you can pay for most things you need, and for those things that you end up not having enough money for, you’ll find that if you can contribute in some fashion to it that you’ll get what you need to get things taken care of.

I said this in the past, and I will repeat it now: don’t allow yourself to be a victim to credit scores. Take back your power, and be in control of your own finances.