Card issuer unlikely to hold a grudge for very old debt

Reapplying to same company OK if credit report is now good

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question Dear Opening Credits,
I'm trying to rebuild my credit and want to apply for a credit card. As of last month I have no negative account history on my credit report. However, one of my old, mismanaged accounts was with Capital One, but a credit card offer website now says I have a good approval rating for another Capital One card. Will my past account history affect my chances of being approved for a new Capital One card? -- Shaun


Dear Shaun,
In some ways credit card companies are similar to individuals. Like how you or I might help out a trustworthy friend, a bank may lend money to people who have demonstrated financial responsibility in the past and who seem to have enough money coming in on a steady basis to cover future debts.

If a friend borrowed money from you a decade ago but never paid you back, you might hold it against him forever. A bank is less likely to do this, and more likely to rely on the cold logic of a credit scoring algorithm, which factors in the behavior of millions of people to come up with a predictive model of what will happen in the future. And algorithms say that what happened recently is a much better guide than what happened many years ago.  

Most negative information, such as late payments and defaulted accounts, remains on a credit report for seven years. The older a bad mark gets, the less impact it has. You don't mention having positive data on your reports but you might have some if you've managed a car or home loan well or have kept other credit cards in good standing. Closed positive account records will be listed on a credit report for 10 years and active accounts will remain indefinitely. 

Keep in mind, however, that Capital One will have its internal records showing your old issues with them. So even if your credit report looks sparkly clean to other lenders, it won't to Capital One, and it is within its rights to turn you down. Capital One does have a wide variety of cards, including some for people with bad or recovering credit. It may offer you a deal, but one that is less generous. Comparison shopping is always wise, but particularly so for you.

Here's what I want you to do next:

  1. Get your FICO scores. There are many types of credit scores on the market but FICO scores, which ranges from a low of 300 to a high of 850, are most commonly used by credit card companies. To see your FICO scores, go straight to the source and purchase them from They're about $20 per credit bureau, so if you want to save money one should be sufficient.
  2. Research the credit cards are available in your scoring category. On you can quickly see which cards are available to people with different types of FICO scores. In general, a bad score is 600 or below, poor is 600 to 650, fair is 650 to 700, and good is from 700 to 750. Anything above the mid-700s is excellent. With these rankings in mind, compare your FICO score to different card's "credit needed" information on this site to see what your options might be.
  3. Identify the card you like best. As you'll quickly see, credit card interest rates will vary. A lower rate cards is best if you're going to carry a balance over from one month to the next -- which I don't recommend, but sometimes it happens. Many cards also come with reward programs. It shouldn't take too long to pinpoint the card that looks like the best fit for you, which may or may not be from Capital One. Pick a card, complete the application and wait for approval.
  4. Use the card advantageously. If you follow these simple instructions, you'll qualify for the card and will be ready to charge soon. Keep in mind that your new account activity will begin to appear on your credit reports when you first apply for the card (it will show up as an inquiry) and then when the account is granted. After that, it's all about what you do with the account. Charge often, but always repay on time and in full. As the months turn into years, your credit rating will increase.

Finally, keep an eye on your statements and credit reports. Make a habit of scanning them, not just for accuracy, but to stay aware. It is very important to stay in control of your money and credit. Mindfulness is essential.

See related: 3 quick, easy, inexpensive credit score rebuilding tools, Rebuilding credit? Semisecured card may help, Help your credit score rebound after a fall

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Updated: 01-21-2018