While technically the above statement is not true not many people want to wait 7 years for all their negative information to fall off their credit report based on the Fair Credit Reporting Act.
Its human nature to bury our heads in the sand and ignore the problem. Hoping it just “goes away”. If you have 7 years to spare then sure it’s not a problem….Or is it?
If you have a tax lien (state or federal) or if you were sued and had a judgment placed against you that judgment can be refreshed every ten years to make sure it remains in the system due to its age and not fall between the cracks.
Banks do not expect you to have perfect credit. If you do then the rates will obviously be better as it means you are a good risk and worth a low interest rate. Having collection accounts, charge offs, car repossessions and medical bills are not deal breakers but it depends on numerous factors, too many actually to list here.
What you need to understand is these problems cannot have happened last month or in the last few months. Every file is different and specific recent problems, late payments or collections make banks nervous when someone is asking them for tens of thousands of dollars or even several hundreds of thousands of dollars for a home.
I had one executive of a finance company come to me who was originally from England, she had a bad divorce and left the country not expecting to come back but as life has it she returned about 6 years later and needed to buy a home. However, a collection account ballooned up to approximately $50,000 so we had to implement a plan after I gave her the options that were available to her. She said after the divorce she didn’t plan on coming back for a long time until plans changed business wise but she was forced to return and confront the problems of her past.
So the moral of this story is, sticking your heard in the sand for 90% of the time if not more, does not help. We all need to be proactive. Whether that means doing something now or speaking to some professional to gather advice on what to do in the future.
Hope this little blog helps and if you need to speak to me just send me an email to email@example.com and we can set a time to speak!
About Wayne the Credit Guy:
Wayne Sanford, also known as “Wayne the Credit Guy“, is the owner of New Start Financial Corporation. With nearly a decade of experience working in the credit industry, Sanford has personally reviewed more than 13,000 consumer credit files for mortgage professionals, investment groups and consumers. – See more at: http://waynethecreditguy.com/waynes-bio