CREDIT » CREDIT REPAIR & REPORTS

The FICO score has recently undergone a revised system that is predicted to help some borrowers and hurt others. The specific details inherent in the revisions have yet to be revealed; however, some basic information has been released to give potential borrowers an idea of what they can expect.

The Good

For those who are looking for information on how the revised FICO system can possibly help them, here are a few details to consider:

• 1-timer mistakes won't hurt you. If you fail to make a payment on your credit card one time then it will be forgiven. This is a great benefit for those who are never late because prior to this change a mistake like this could cost you up to 100 points. Now, you have a chance to make this one mistake. However, if it happens more than once, you'll suffer even greater repercussions.
• Late payments will be weighed differently. Now, if you have a late payment for $50 and one for $1,000, they will be looked at differently. You won't have to suffer as much for the lower amount as you will the higher denomination.

The Bad

Now let's look at a few details of the revised FICO system that could have a negative impact on borrowers:

• Authorized users are no longer included. Depending on how this is viewed, it could either be bad or good. However, it makes the "bad" list because one must assume that not too many people are eager to add their name as an authorized user for credit that could negatively affect their FICO score. So the people who are most likely to be affected are those who could have benefited from being included in the other person's credit. For instance, if a husband who jointly owns a credit card with his wife cannot have the credit card information noted on his report, his score could go down.

There are more changes sure to come with the revised FICO system. But as long as you stay posted on what those changes are, you can continue to make the efforts necessary to maintain a good FICO score.

If you're wondering whether collection accounts from companies or agencies you owe will show up on your credit report, the answer is maybe. It is typically up to the company's discretion to determine when or if they will report any negative activities to one or all of the three credit bureaus. However, there is usually a better chance than not that your accounts will show up.

Why Are Collect Accounts Reported?

When you owe a lender or company money, in order to alert other lenders about your likelihood of default, your account is often reported to one or more of the credit bureaus. Third-party collection agencies agencies that companies send collection accounts to in order to collect debts are also allowed to have items listed on your credit report. In the listing, the company reports your debt, the amount you owe, and whether or not youve paid, which is all reported and viewable by future lenders.

How Long Can Collection Accounts Stay on My Credit Report?

As specified in the Fair Credit Reporting Act, collection accounts typically stay on a report for 7 years. Even if you pay off your account before it should be automatically dropped, it does not have to be removed; it can instead simply be marked "paid," which still shows that you once had a defaulted account.

Having Collection Accounts Deleted

While many collection accounts remain on your credit report for numerous years, even if they're paid off, there are ways to have them deleted. Probably the best way to have any account removed is to negotiate with the agency you owe before you ever agree to pay your debt. By making the listing removal a part of the conditions associated with you paying them back, you can ensure that they will actually remove it once you've paid it back in full.

While collection accounts very often appear on your credit report, it's good to know that they can also be removed after you've taken responsibility for your debts and paid off your balances.

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