Paying on time helps
build a healthy payment history. And, as the largest factor in determining
your credit score (at 35 percent), it's the best way to rebuild damaged credit.
Even if you've had credit problems in the past, depending on how many creditors
were involved and how far past due your accounts were, a good 12-month payment
history can usually produce noticeable results. "If you fell off for a few
months, a year could get you back on track," says McClary.
Expect information about past-due payments to stay
on your report for up to seven years. Your score can still improve during
that time as long as you make steady, on-time payments. Seven years after
the date of last activity the mark may drop off, but the avenues of collecting
the money may not be closed. While the statute of limitations on reporting
is seven years, the length of time for attempting to collect varies by state
and a collector may file a lawsuit against you. In that case the negative
mark will reappear as a judgment against you.
Tip: This work sheet makes it simple to be timely.