March 10, 2006
Derogatory items in credit reports
In credit repair, the long term effects are what you should be concerned with. Like a diet, the body fluctuates naturally on a daily basis and following a diet will deliver results in the long run.
In rebuilding credit, simply removing derogatory items is not enough to rebuild credit. Use secured cards, pay credit lines on time and live on a budget.
There may be many reasons for your score going down despite your credit repair efforts. The trade line you remove may have been very old while the credit scoring model considers credit history of at least 60 months on all active trade lines.
Another possibility is that you removed an account with an open status and zero balance. This could have put you over all credit card limits ratio far higher over 25% used. Credit scoring rates favorably when less than 25% of total balance is used. Raising available credit balance to over 50% can cancel out the benefits of removing old lines.
You may have removed installment loans like car and mortgages from your credit report. The preference is for a balanced report with installment and revolving credit cards as well. Credit card info.com reports:
You have to remember with credit repair, it's the long term effects we're shooting for, not the next day results. It's just like going on a diet - even if you are strictly following your diet, the body naturally fluctuates on a daily basis and from one day to another you may see a gain. But in the long run, if you are following the diet (which includes not just diet, but exercise), you will get results.
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