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The Effect Of Time On Your Credit Score

One factor not often discussed about credit is the effect of time on your score.  Of course most people know that the amount of time good credit has been established or since a late payment occurred is important.  But did you know that problems >2 years old only make up 30% of the weight of your score?

As events (like collections or late payments) recede into the past they will have less and less effect on your score.  For example, the rough weighting of credit score by year is:

40% items in the last year
30% items in months 12 -24
20% items in months 24 - 36
10% items that occurred >3 years ago

This is good news for anyone that has had past credit problems.  It shows that by building positive payment histories for 1 - 2 years can have a significant effect on your credit score.  While collections, late payments and other negative items can remain on your credit report for 7 - 10 years, a few years of on time payments can result in a significant improvement in your score.

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