Credit Score

The Bad Stuff Is Off My Credit Report. Will My Credit Score Go Up?

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So you’ve had some negative items on your credit reports — maybe you had late payments, or you defaulted on a credit card, mortgage or other kind of debt, or had collection accounts in your name.  Now you’ve resolved the problems with your creditors.  Or you might have found errors on your credit reports, or discovered fraudulent accounts because of identity theft — and you succeeded in getting the issues straightened out and the items removed from your credit reports. So now you’re wondering: Will your credit score go up?

The answer is: Your credit score will probably improve. However, it may not improve as you expect. Here are some examples where you might not see the bump you hope for:

Closing negative credit card accounts. Closing credit card accounts will not improve your score. Closing the account also won’t remove the record and any associated negative payment history from your credit report. The negative information will continue to show and will continue to be used in the score calculation.

When negative records expire. Removing negative information from your credit reports may not immediately increase your score as you expect. There could be additional, heavier weighted negative information remaining that will prevent an immediate increase in your score. For example: If you remove a collection record from 7 years ago but have a charge-off from a year ago, the charge-off has more of an impact and is hurting your score more than the collection from 7 years ago. You probably won’t see a large impact in this case.

Since your credit score is calculated by the information in your credit reports, it’s important to check your credit reports regularly. By doing so, you can catch mistakes or fraud, or review it for any problems with your debts that you may (or may not) be aware of — and then take action to correct them.  You can pull your own credit reports from each of the three major credit reporting agencies once a year, and check your credit score once a month for free using Credit.com’s Credit Report Card to stay on track for your credit score goals.

Image: iStockphoto

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