So, you lost your job in the 2008 recession. Times were tough, and you had to juggle some bills. Sometimes, unfortunately, even the best jugglers drop the ball. Equally as unfortunate is the damage that dropped debt can do to your credit rating. A credit card or loan payment that is 30 days or more late, is a negative mark on your credit rating. So, how long do you have to wait for bad marks to come off of your credit score?
The Bottom Line
The bottom line is – bad marks stay on your credit score for 7 years. There are some things you can do, however, to pile good marks on top of the bad score to redeem yourself.
DOLA
Your first step is to get a copy of your credit report. Once it is in hand, look for the DOLD or DOLA. That is the Date of Last Deliquency or Date of Last Activity. Count forward 7 years past the DOLD or DOLA, and that’s when the marks will drop off you your credit report. This applies to both good and bad marks.
If you count backwards 24 months from today’s date, the items listed on your credit report will represent 70% of your score. Yes, there are items before and after that time on your report, but it’s a weighted average. If you have bad credit right now, as in a delinquency notice or collection notice, it will hurt you the most over the next 24 months.
Current Ratings
Current ratings play into your credit score, too. Current rating is any debt you’ve been paying on for at least 12 months. This will include house payments, credit cards, car loans, and personal loans. This is where you can help yourself. You need at least 3 lines of credit that qualify as current ratings. A new credit card, for instance, won’t qualify as a positive unless you have made at least 12 payments with no problem.
To repair your credit score on your own, you need to maintain between 3 and 6 current ratings. These basically “cover up” the bad scores you built up.
For example, if you missed several credit card payments when you lost your job in 2008, and haven’t done anything on credit since, then that credit card is still the newest thing on your credit report. It’s a big black mark. But, if that was the only sacrifice you made during the time, and you maintained your house payment, student loan, another credit card, and your car payment, you’ve got 4 cases of “current ratings” in your favor. They’ve been there for several years. This covers a multitude of problems.
Keep in mind that getting rid of bad credit isn’t enough. You have to build good credit. It also helps to hire professionals to negotiate with credit reporting agencies. They will look at your report and dispute any discrepancies. They will get the agencies to either validate low ratings or remove them .
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