Finance Roll

The length of time to rebuild your credit history (thus improving your credit scores and your chances of getting a mortgage) after a negative change depends on the reason behind the change. Most negative changes in a credit history are created by the addition of a negative element to your credit report - elements such as a late payment or a collection account. These negative elements will continue to affect your scores in varying degrees until they reach a certain age. For example, credit inquiries remain on your credit report for up to two years. Delinquencies will typically remain on your credit report for seven years. Most public record items also stay on your report for seven years, with the exception of some bankruptcies, which may remain for up to 10 years and tax liens that are unpaid, which remain for 15 years. The affect these items have will, however, diminish over time. Each month that goes by will reduce the overall affect of a negative item.

How long does it take for current changes to affect your history?

First of all, most creditors send information updates to the three main credit repositories routinely, however this doesn't guarantee that you're most recent payment will show up on your current credit report. The credit repositories update their records as soon as they receive the information from each creditor, but there can be lag time in the process of getting the information from the creditor.

If the negative information on your credit report is accurate and verifiable, time and the conscientious use of credit may be the most effective weapon in restoring your credit history. Late payments and accounts that have been charged-off will eventually roll off of your report after seven years. Creditors look at your pattern of payments as well as one-time occurrences, so remember that a good pattern of payment can make a positive impact on those past blemishes which.

How long does it take for corrections to be made on your credit report?

If you find a mistake on your credit report you should sent a request, to the credit repository that is reporting it, to have it corrected. The credit repository must investigate your claim within 30 days (unless it is frivolous). If the item is incorrect or even if it cannot be verified in the thirty day period, the item must be deleted or changed as you requested. You can also request that an updated copy be sent to any individual or organization that has received your credit report in the past 12 months.

What are some quick things you can do to improve your credit history?

Make all current payments on time (without exception). This is always a given.

Avoid opening any new credit accounts other than the mortgage you are preparing for.

Consolidate your mortgage rate shopping to a short period of time so that the inquiries are considered one inquiry for one new loan rather than several inquiries for multiple new accounts.

Pay off or otherwise resolve any disputed accounts or accounts that are in collections. Eliminating even small collection items like a parking ticket can bring your score up 15-30 points. To speed up the process, get a letter from your creditor that shows "collection paid" or "collection deleted" and fax it to the repositories, talking to them on the phone and coordinating a quick update of your history if possible.

Check your credit report and immediately request corrections to any mistakes.

Reduce your overall debt, especially any revolving debt balances such as credit cards, but don't close the account. Just leave them with a zero balance or a balance below 25% of the total available credit.