I have heard that derogatories/collections/late pays have very little effect on your fico score once they are more than 24 months old. However, I got my q-space score and the one thing they emphasized as the reason for my poor score (621) was the fact that I had 4 accounts sent to collection. These accounts are all paid in full, and are older than 2 yrs. (the last activity date on all of them is 1995.) Does this mean that they continue to have a bad effect on my credit even though they are old? does this 2 yr rule only apply to late pays on open revolving accounts? Im confused. Thanks for your help guys and gals.
Yes, that is what it means. they hurt your score the most in two years. With four collections the fact that they are 4 years old it helping you have a 621. How is the rest of your credit. Do you have any other lates. BTW: q space analysis is not the bible. They are stating the obvious. You have collections. Besides BK's and Public records, that is the worst of the credit killers. I have also read that once it is 5 years old or older it has minimal affect on your score. I also want to point out that I stated earlier that I think your score will start to rise considerably more once the collections get older, not that they no longer hurt your score once they get 2 years old. I hope I did not confuse anyone with my earlier post to Momof5. (If that is the post you are referring to and if you are not, I guess it is one big coincidence) roni
On my Trans Union credit report from which I was recently rejected by Chase I have a collection from 6 years ago. A new card from 6 months ago, a new card from 3 months ago and a few inquiries. If the reasons they give for rejections are in order of seriousness the collection account came in first and then was something like insufficient credit experience. I think the effects of old collections and charge offs just depend on your situation. Since I stopped using credit for a very long time I think the collection account is still hurting.
Certain types of derogs affect your score more than others. The age of the derog affects it WITHIN the range that the OVERALL
Darn ... I'll try again. Certain types of derogs affect your score more than others. The age of the derog affects it WITHIN the range that the OVERALL derog affects your scores. A BK hurts BAD, no matter how old. The older it is, though, the LESS it hurts, but it still hurts MORE than, say, a six month old collection account. There's no magic '24 month' period. The 24 months is what is claimed to be the typical period a lender is concerned about, but that's AFTER considering your score(s). If you're marginal, a clean 24 months might put you over the line. If you're at a 550, six years of good trade line activity won't do you a damn bit of good if the lender's requirement is a 680. 24 months is also the period that inquiries are kept for, so maybe that's what you were thinking about.
Thank you Roni, Erik and John. To elaborate: I have no BK or judgements on file. (Never had a bk, judgement removed last year, dropped off due to 7 yr mark.) I have these four 1995 collections, and a paid charge off from GMAC, 1995. My credit has been clean for the last 2 years, which is to say that my last late payment on a credit card was 1/99. I have 2 open MBNA accounts and a PRovidian. I know the late payments on the MBNA are hurting me, but hoping that the more time passes, the better it will be. I also had a Ford lease, (2 yr)which had 4 30 day lates, last one being 1/99. I bought the car, had a perfect 18 month record, then paid off the balance in one lump some. ROni, I know you are a refugee from the other credit board that Dan used to frequent and I think that is where I got the idea of the 24 month period being the goal to get past. I dont have any inquiries from the last 6 months. I know that QSpace is not an exact science, I guess they just latched onto those old bad accounts as a reason for my poor score. I guess the solution is to try and get rid of those old ones, but for the life of me, the creditors wont budge. I have tried everything, they just keep verifying. Ah well..its a waiting game I guess..
