Often, people do not know what information is listed on their credit report. Even though the information is readily available, most people fail to check it before they apply for a mortgage or car loan. When the loan officer shows them a long list of delinquencies, they are surprised or dismayed by the findings. You can never be too careful when it comes to monitoring your report. This monitoring should not be undertaken only when you are considering purchasing an item that will be financed. It should be evaluated three or four times a year – once every quarter is a good timeframe.

When conducting self-evaluations, there are a few important damaging items of which you should always be aware. Most people know that late or missed payments can damage your credit score. Late payments can be addressed by making timely payments. However, there are other no-no’s which, left unresolved, can also result in your being charged higher than normal interest rates (if credit is extended to you at all), being denied insurance, or even being passed over for a job. Unlike late payments, these no-no’s are virtually impossible to remove and will adversely affect your credit for years. The life span of these no-no’s on your credit report range from seven to fifteen (15) years.

So, while it is imperative to know what you should have on your credit report, it is equally important to know what credit no-no’s you should avoid.

1. Tax Liens
Property taxes must be paid on your personal home as well as any other real estate you own. The government can and will seize your property if you fail to pay your taxes. You are responsible for the tax liability even if the property has been sold to someone else. Life span is fifteen (15) years, if unpaid, and ten (10) years if paid.

2. Bankruptcy
Filing bankruptcy is a legal procedure used to reduce or eliminate debt. This device allows those who have incurred significant debt an opportunity to start over. Unfortunately, there is a heavy cost for this fresh start. Most creditors will deny your application for credit based on this factor. However, it is possible to start the process of rebuilding your credit once the bankruptcy has been discharged. Life span is seven to ten (10) years.

3. Foreclosure
Mortgage companies place the homeowners who are unable to make their mortgage payments in foreclosure. During this time, if you attempt to purchase another home, a past foreclosure is a red flag. Creditors are often very wary to grant a mortgage to a consumer who defaulted on a previous loan. Life span is seven to ten (10) years.

4. Charge-Offs
Creditors often deem accounts uncollectible after three (3) to six (6) months of missed payments. They then write off the account and provide information to the credit bureaus that the account has been “charged-off” or “written off as uncollectible.” Even if you pay off the account later, the discrepancies remain on your credit report. Life span is for seven (7) years.

5. Debt Collections
Creditors that charge-off debt are still entitled to pursue the debt for repayment. They often retain the services of a third-party debt collector to pursue repayment. If a creditor contacts you and makes payment arrangements, failing to live up to that commitment can result in even more discrepancies being added to your report that indicate your failure to live up to an agreement. Life span is seven (7) years.

6. Lawsuits or Judgments
If your account has been charged-off and placed in collections and the creditor still believes they can collect on the outstanding debt, they may choose to sue you. If it is proven that the debt is yours and that your payment history is accurately depicted, the court can enter a judgment against you requiring you to repay the debt. Life span is seven (7) years.

These six things can be detrimental to your ability to get inexpensive credit. Therefore, you should do everything possible to avoid them. Use the Renewal Coach to help you develop a gameplan to avoid these no-no’s on your credit report and to find out what you can do to improve your credit.

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