Credit Tip From National Credit Care

Question: When a collection or another derogatory item is deleted from the credit report how much will the score increase? The answer, go figure, is that it depends. The question that should be asked is what are the factors that it depends on?

Answer: A derogatory account can weigh as little as 0 points on your credit score! But don’t get too excited because you actually don’t want your derogatory items weighing nothing. On the other side of the scale you could lose up to 175 points with one negative remark and this is much better news…don’t worry I’m not insane, let me explain.

Your positive credit represents your potential credit score ceiling, and your negative credit reduces that ceiling to wherever the scores are sitting. The more points you lose on a negative remark the better your positive credit was to begin with. For example, if you have 10 collections and nothing in the positive account section then you have a 0 or N/A score, therefore each collection weighs 0 points. It’s not until you build up your positive accounts that these collections carry any weight. Other major factors regarding weight of a derogatory remark is the quantity of negatives you have, the more negative marks on the credit report the less each one weighs (diminishing returns), and also your Date of Last Activity (DLA) is a major player. The more recent the DLA the more damaging the account. The balances of an account are not a factor!

Aubrey Kloss
Regional Director and Manager
National Credit Care

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