The second in a six-part series replaying a credit scoring and reporting question and answer session CreditCards.com held with Experian.
Below is the second of six parts of the video replay of that event — which was moderated by CreditCards.com editor-in-chief Dan Ray — as well as a lightly edited transcript of the video.
Griffin covered a wide range of topics in the 45-minute chat. If you missed it or just want to see it again, you can watch it below or check out our event page at CreditCards.com/AskExperian.
And don’t forget, we’ve also got dozens of helpful videos in our complete video archive here at CreditCards.com. That includes a reply of our first live video event — a question-and-answer session on credit card reform with one of President Obama’s key economic advisers.
Click the links below to watch the video replay or read a transcript of our credit reporting Q&A with Experian in its entirety or in six separate parts.
The following is a lightly-edited transcript of the above part of CreditCards.com’s recent question and answer session on credit scoring and credit reporting with Experian. User questions are in bold.
(0:06) RAY: Well this is interesting, we’ve got the first poll results back and we asked: How often you check your credit report? And 40 percent say that they do so annually, 8 percent say: never. Is there an ideal answer? How often should you check your credit report?
GRIFFIN: I think the 40 percent have it right. You should check your credit report about once a year at least. If you’ve had no problems, no issues, and no concerns that may be enough. If you’re concerned about credit issues, you should probably check it more often. If you are concerned about or rehabilitating your credit over time, you might even consider subscribing to a credit monitoring service that will let you track your progress over time to see how you’re doing, see how your scores are developing in order to do that more often. But once a year is usually about right for people.
(0:47) RAY: And we have the question from Gail Cunningham. It’s the Gail Cunningham we know, she’s with the National Foundation for Credit Counseling. Thanks for tuning in Gail! She asks: “Would you please address how to handle applying for credit if one spouse has bad credit and the other one has credit in good, has a good credit rating?” Credit bureau reports are for individuals, not couples, correct?
GRIFFIN: That is true. Hi, Gail. I know Gail as well; we go back a long ways. And the answer is with mortgage lending, the lender is going to look at both credit histories so we advise people to always get your credit report at least several months in advance of making a major credit application or major credit purchases. Especially something like a mortgage; that will let you begin to address any issues you have. Again, it may be necessary that the couple, if one person has a very serious problem with their credit history, one individual may have to qualify independently or it may be that the one individual’s credit history is strong enough that together they still will qualify. But you really need to look at taking time to improve that person’s credit history. And again, it depends on that individual’s situation as to how long it will take rehabilitate that history.
(1:58) RAY: A question from Nicole: “How many credit cards and installment loans should a person have to create the best credit score?”
GRIFFIN: And again, the answer is: it doesn’t really matter; there is no perfect number. Credit scores don’t look at everyone the same way either. When credit scorers look at your credit history, the first thing they do is look at whether or not you have something that we call a thin file, which would mean a very short credit history with fewer accounts or that you have a long history with a lot of accounts. And the things that represent risk for a person with a long credit history are very different from the things that indicate risk for a person with a very short credit history; so you’re not going to be compared to someone with a long history. So whether you have one or two accounts, a car loan; that could be just fine for having a good credit score. What you really need to be concerned about, again, is making sure all of your payments were made on time and you keep the balances low on your credit cards. If you do those things; your credit score should be just fine.
(2:53) RAY: From Susan, and again I hope you’re not asking for yourself: “How soon after judgment is filed against a party to a lawsuit does that judgment appear on your credit report?”
GRIFFIN: Sure, judgment, civil judgments are a type of debt you owe through a court so they will appear on your credit history. There are companies that, and we do collect, judgment, civil judgments from courts. Typically, we say even with accounts, with credit accounts, allowing 45 days to 60 days will give usually enough time for the cycle to process through and that judgment to appear. It could be a little bit longer than that when judgments are a little different.
(3:31) RAY: From Kathy: “Why is it that when we ask how you verify a debt that we hadn’t disputed you give us a generic response when that was not the purpose of that section in theFair Credit Reporting Act“ So she’s got a question about the process dispute process
GRIFFIN: Sure. And what happens with a dispute process is that the credit reporting company is required to go back to the lender who, then is required by federal law to review their records and respond to us one of three things: that the information report is deleted, or should be deleted; that it’s updated according to the dispute of what they find differently; or that would remain the same. We don’t have access to the lenders’ records and that’s why the dispute process operates as it does. The lender has access to the records; we can’t go and verify them. So all I can tell you is this is what the lender told us and that’s really the only option we have.
(4:26) RAY: Bob Newbower asks: “Why are there accounts listed on my report that I have not used for over ten years?”
GRIFFIN: If you haven’t used them for over 10 years and have a zero balance and no late payments, they’re probably going to be coming off very quickly. I’m not sure why they would be there after 10 years because a closed account, if they’re open and active and remaining open, open accounts with positive credit remain indefinitely, so that could be the answer. If they’re open, active and never had any problems, they’ll stay there until they’re closed. Once closed, they’ll be deleted 10 years from the close date; if they have no negative information associated with them. So we do that by keeping the positive information; it will outlast any of the negative information. Helps you rebuild a credit history if you’ve had difficulty.
(5:13) RAY: Let me ask a follow-up on Bob’s behalf, on your credit report it also says your total length of credit. How long, so in some sense, these old reports stay reflective if you don’t see the specific report, right?
GRIFFIN: Well, no actually. They will show for, again, for positive accounts. No negative information, open accounts, they’ll remain indefinitely. So I’ve seen credit reports with an account that is 30 years old. On the other hand, if you have negative information; goes to charge off collection, that sort of thing- that information is deleted seven years from what’s called the original delinquency date. So if you have negative information associated with an account and that account’s closed or been charged off and sold to the collection, it should come off seven years from the date it first became delinquent. So you shouldn’t see anything but positive, open accounts for that length of time.
(6:03) RAY: OK, very good. So now Cheryl has a question, kind of a follow-up question. She asks what you just answered: “How long does a charge off or a collection stay on a credit report?” She also asks: “What if, what happens to the collection agency’s later attempts to collect the debt and it shows back up on the credit report?”
GRIFFIN: That’s an excellent question. Let me clarify first how long information stays because that’s an often misunderstood issue. And the answer is that late payment and any charge off in collection account will be deleted seven years from what’s called the original delinquency date of the original account. The original delinquency date is simply when that account first became negative, first became late, and after which it was never corrected, so it was late this month and continually late until it was charged off and sent to collection. The FACT Act, the same law that allowed for the free annual credit report, also requires collection agencies to report that original delinquency date to us, from the original account. It’s very important because it helps us make sure that we delete that collection account at the right time as well, and track that. So if in the future that collection agency tries to report that account and the original delinquency date shows up and we match it to that account; it should not appear on your credit report.
(7:24) RAY: Susan asks a common question, “What’s the fastest way to increase your credit score?”
GRIFFIN: Sure. And there is no quick fix. If you’ve had problems in the past, it’s going to take time to rehabilitate your credit. So the answer is: the fastest way is to bring your accounts current, if they’ve been late. Catch up on any of the late payments and continue to make on-time payments, all the time, and eventually that score will get better. Now, depending on her score, it may take less time or more time. If you’ve had a fairly solid score that’s come down and you’ve had issues and you do that — it may come up more quickly than if you’ve had some real strong issues and have had a very poor credit history and poor credit score as a result, it’s going to take longer.
See related: The 5 basic elements of a FICO credit score, How to improve your credit score, An interactive, step-by-step look at a credit report, 10 things you must know about credit reports, scores, How to dispute credit errors, mistakes, Protect your credit card, score, 8 steps to picking a credit counselor, Get the REAL free credit report, 5 things you should know about business credit scores, 10 ways students can build good credit, How credit card reform will impact you,
Find the terms you must know in our credit card glossary