Do you know how long various items are reported on your personal credit?
How about the pros and cons of having authorized user accounts?
What about all the differences in credit scores?
One of our local business bloggers has some great information. Here are some answers to the personal credit questions I posed above, with more information available on Dana’s site (listed below).
How long do negative items remain on your credit report?
Many remain for seven to ten years – a long time – with bankruptcies and tax liens lasting even 10 – 15 years. Good accounts typically remain at least 10 years.
Authorized user accounts – pro’s and con’s – This is when you give someone else the right to use your credit, but they don’t have the responsibility to pay for it. It can be a strategy to help someone else grow their personal credit but can hurt your credit if they abuse it.
Differences in credit scores – There are many reasons these can be different. Some companies only report to one credit bureau, and scores are based on what is reported for that credit bureau. If you have a late payment showing on only one bureau, that score will generally be lower for that bureau. There could be errors on a report, or missing information. There are even different scoring methods, depending on the credit bureau.
How do they come up with the scores?
The top two factors in the credit score are your payment history and how much you owe compared to your credit limits. This accounts for 65% of your score. So if you start showing high balances on your credit cards or have late payments, your score can quickly be driven much lower.