Credit Reports how Long your History can Haunt you

It’s not just your payment history that can haunt you. Let’s not overlook the problem of unsecured debt. Your history can haunt you for seven years. Your unsecured debt will haunt you as long as it lasts. It could be 12 months, or it could be 50 years depending on your ablility to retire it.

This aspect of your credit history can be much more dubious than a shaky payment profile or two if your overall record is good. You can make every payment on time and be responsible with your finances for many years, but if your debt to available credit ratio is poor, you will never receive a decent credit rating.

Banks have created this monster by making credit card debt too easy and then raising interest rates to loanshark levels. At the same time, when Congress made bankruptcy more difficult, banks took that as an opportunity to almost double the monthly payments on many cards. The resulting financial hardship has only added fuel to the problem of credit problems. The credit score system is also suspect since it cannot judge a person’s integrity or motivation beyond a line or two submitted by a creditor that may be less reputable than the one they are reporting on.

Building good credit is important. Keeping unsecured debt low is just as important. It’s a double headed creature, and both must be attended to if you want a good credit rating.