|7 ways to be a dolt about credit
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In order to dispute
something on a credit report, one must, of course,
check one's credit report. It's easier than it's ever
been, so consumers have unfettered access to their
own credit information, a vast improvement over the
and time-consuming methods used in the dark ages
before the Internet.
Unlike other issues that affect credit
scores, mistakes sometimes can be remedied easily
and quickly, so it's worthwhile to keep tabs on your
Make late payments or skip them entirely
It seems almost too obvious, but it bears stating that paying late and missing payments altogether are stellar ways to ensure that your credit score will scrape the bottom of the barrel.
Fortunately, as it happens, not all missed and late payments are counted equally in credit scores.
According to MyFICO.com's Paperno, the FICO score judges missed and late payments by several different criteria, including how recently it happened, how severely late the payment was and the frequency of missed or late payments.
The recentness of the incident has the most bearing on the FICO score.
"Believe it or not, a 2-year-old incident
of a payment being 90 days late is not as bad as a
recent 30 days late (payment). The older one may have been one
blemish in a long history but a 30-day this month
can lead to a 60, which can lead to a 90," Paperno
"The score is a predictor of future
risk, and all of the factors that are looked at are
viewed as to how well they can predict the future.
So the more fresh or recent the information is, the
more predictive it is," he says. "Lenders are always
looking to spot potential problems as early as possible."
The further back in time the mistakes
are, the less impact they have on your credit score.
Obviously, the fewer mistakes consumers make, the
better for their score. Once the mistakes are several
years old, however, they may not affect the credit
score at all.