Did you know that the Payment History section of your credit score accounts for 35% of your credit-score pie? This is where all of your derogatory items hang out (except for inquiries which get their own piece of the pie). Here’s a question where you might be able to guess the answer … which derogatory account weighs the most: a judgment, collection, bankruptcy, 150-day late, or a tax lien? Well it’s just another trick question because with such limited information, there is no clear answer. Would you need to know the balances of each one to better assess? In general, balances are generally irrelevant on accounts when it comes to credit-score weight. Your $0 medical collection could certainly weigh more than a $100,000 tax lien. Okay, so what the heck is important? Three magical letters: “D,” “L,” and “A,” otherwise known as date of last activity. The DLA represents the weight of an account within your payment history section. Simply put, the newer the account (irrelevant to other factors like the type or balance), the more damaging it will be on the credit report. For example, your $10,000 judgment that is 3 years old weighs less than your Pizza Hut collection that you just paid off from five years ago for $14. This is due to the fact that your Pizza Hut collection DLA has just been renewed.
Don’t like this? I’m not surprised, neither do we. The difference is that there probably is a lot we can do to offset these injustices. Please call us at 1-(866) 488-2066 and we will help you put matters into your own hands.