Issues regarding your Past Credit

By | March 14, 2010

Many are familiar with the past seven years rule when it comes to their credit history, but this is not automatically the case. Our debts do stay on our on our credit report for the past seven years but more importantly is the last year and a half to two years. The reason is because people and situations change. If someone is doing well in the past year or so, this often can overshadow the negatives from earlier. The opposite is also true, if someone has had excellent credit all their life but then has had bad credit for the last two years, you can understand why this person is still considered a higher risk. A person who claimed bankruptcy four years ago but is now paying off their bills on time is thought to be more credit worthy than someone who has not paid their bills for the last year and a half.
Regarding Bankruptcy, it used to mean it was no more purchasing for you on any kind of credit. While many believe bankruptcy should try to be avoided it is not any longer viewed quit as bad as it once was on your credit report. If you have filed for bankruptcy in the past, but have been able to pay off your bills regularly for the past 18 months or more you will find creditors more willing to offer you money.
Bankruptcy however should not be taken lightly because once you file you will not be able to file again for 7 to 10 years. Bankruptcy should be used as the last possible resort. If you truly believe you cannot get out of your current situation after trying other methods, then and only then should you consider it because it will not be an option again for many years to come. However if you did file for Bankruptcy and you have had a good payment history after the fact then you will be a candidate for loans such as car or mortgage loans.
Were you aware that if your balances are always above the fifty percent zone of your limit that you are probably considered to be at a higher credit risk? Even if you happen to be paying off your bills regularly over the past few years, it can put up a red flag that says if you are unable to pay off your debt, why should more be issued to you? It is a good practice to keep your balances under this amount and actually closer to the 30% mark would be much better. Doing so could raise your credit score upwards as much as 50 to 80 points, something definitely to keep in mind. If you are finding keeping your balances that low, perhaps seek out some professional debt assistance counseling. They are trained in helping you to make your payments more manageable.

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