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of the creditor terms and conditions will stay on a credit report for a period of seven years once the account is no longer active, unless a bankruptcy is involved.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.

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