How Long Can a Negative Item Stay on Your Credit Report?

So, you have been following our advice and taking a look at your credit report once a month? Good job, you’re to be commended!

You may have noticed that there are accounts on your reports that are negatively impacting your scores.

How long can those negative items stay on your report and cause you angst?

The answer is “a little complicated.”

It depends. It depends on both the type of negative item that is reporting and the date that the account was last active before a negative event (most frequently a late payment) happened.

The Fair Credit Reporting Act defines the date of first delinquency as the date at which you first became late and then never brought the account current before the creditor decides to charge it off or send it to collections.

So, an account can be late, and then brought current. Bringing it current causes the late payment, or payments, to be ignored when it comes to establishing the date of first delinquency.

In order to establish a date of first delinquency, the account needs to be late and stay late, at least until it is charged off or sent to collections. Make sense?

Creditors typically charge off accounts or send them to collections after they have been delinquent for 180 days (Six months).

A consumer’s credit reports are allowed to report negative entries about a delinquent debt for up to seven years after it became delinquent, or up to seven years after it is charged off or sent to collections (In which case it is going to appear on your credit report for seven-and-a-half years after the date of first delinquency.) Any negative information about an account that is reported beyond this time period can, and should, be properly removed.

Some negative items on your credit report, like bankruptcy filings,  are allowed to remain on your report for a longer period of time. The length of time bankruptcy stays on your credit report depends on the type of bankruptcy, but it generally ranges between 7 and 10 years. Some people refer to bankruptcy as the “credit score killer,” as it can immediately knock 130 to 150 points off your credit score.

The shortest lived negative items on credit reports are hard inquiries. Hard inquiries are credit pulls that are done by a creditor to use in a decision whether or not to offer you financing. These inquiries typically only cost your credit scores a few points, but they. can add up if you have a number of them.  Fortunately, these items only remain on your report for two years from the date they are made. Even more fortunately, they only impact your credit scores for six months after the date they are made.

Once the time allowed for a negative item to report expires, it should automatically come off of your report. If it doesn’t, a company like Phoenix Credit Consultants can help you to have it properly removed.

It is important to keep in mind that the fact that the period of time allowed for an item to report on your credit has expired, does not necessarily mean that you are no longer legally obligated to pay that debt. A creditor can sue you up until the statute of limitations in your state for the debt has expired. Sometimes this period of limitations is longer than the period the debt is allowed to report, sometimes it is shorter.

Have questions? Give us a call (314) 429-2040.


Going through a divorce and thinking about refinancing the marital home?

Are you going through a dissolution of your marriage and thinking about refinancing the marital home into your name only? There is a lot to think about when making this decision.

Can you afford the mortgage payment, real estate taxes and maintenance on just one salary?

Did you know that there are special considerations given by mortgage lenders as to when and how spousal support can be counted as income?

Is your individual credit where it needs to be to qualify for mortgage financing?

Click on the link, below, to view a recent article from “My Mortgage Insider” where our President, Charlie Scanlon, was interviewed for his thoughts about this important decision.

#mortgagereadycredit #phoenixcreditconsultants #mortgagerefinancing #divorce #creditrepair

Are You Planning To Buy A New House in 2021?

If you’re planning to buy a new house in 2021, the most important thing that you can do to prepare for that process is to check your credit reports from all three national credit bureaus. (Transunion, Equifax and Experian)


The simplest (and cheapest) way to obtain a recent copy of those reports from all three bureaus is to go to Here is a link to that site:

 is the site maintained by the three national credit bureaus, as required by federal law (the Fair Credit Reporting Act.) Until the coronavirus pandemic occurred, you were only allowed to obtain your reports from this site without a charfe one time a year. From now until April of this year, you can obtain your reports free of charge once a week from this site. These reports will not result in an inquiry reporting on your credit and will not impact your credit scores.

  will not provide you with your credit scores for free, they will charge you to get them. There are other sites out there that will give you your credit score for free. (one example is


        Make sure that the score that you obtain is a FICO score, not a Vantagescore. Mortgage lenders almost exclusively use FICO scores when making lending decisions. Vantagescores are more readily available for free from sites like ( above will provide you with a FICO score, although it is much newer version of the FICO score than the ones that are used by most mortgage lenders.)

     Vantagescores can, and do vary significantly from FICO scores, though, often by as much as 60 points. (This is because the two scoring models use different algorithms to compute their scores and also consider different data in their scores.


          Once you have your hands on your credit reports, you should review them carefully for errors. It has been our experience that approximately 25% of credit reports contain significant reporting errors.


            If an error is identified, you can request that the credit bureau reporting it make a correction. This request should be made in writing, through the US Mail. It is possible to make this request online, but doing so may waive important legal rights that would otherwise be available to you. (For example, online disputing changes the rules for the credit bureaus to “reinsert” a derogatory item to your report after it has been removed.)


             Getting the credit bureaus to correct mistakes takes time and can be frustrating. Don’t wait until the month before you want to buy a home to start this process. You must be diligent, pay attention to details and be disciplined with following up with the bureaus when they don’t properly respond. Many people find it easier and more efficient to hire an experienced well qualified credit restoration company to handle this process for them.


         You may also want to  check with local lenders to find out what credit scores they require you to have to qualify for their mortgage loan  products. Different loan products (FHA, VA or conventional) typically require different credit scores to qualify for them. It’s helpful to know how much your score needs to increase before you make the decision to attempt to restore it on your own.

       If you have questions or concerns, feel free to give Phoenix Credit Consultants a call (314) 429-2040. You can also email us at We will be happy to help!

Locus of Control and Your Credit Rating

A study published in The Journal of Behavioral Science in 2008 took a look at the effect of an individual’s personality on their credit rating.  Vanessa Gail Perry (2008) Giving Credit Where Credit is Due: The Psychology of Credit Ratings, Journal of Behavioral Finance, 9:1, 15-21, DOI: 10.1080/15427560801896784.

The study found that one of the key factors in having a good credit rating was something called “locus of control.”

In short, locus of control is the extent to which individuals attribute important outcomes to external forces which are outside of their control. The study controlled for income, education and the incidence of negative “life events.”

The conclusion? Consumers with a higher level of financial knowledge and a locus of control that attributed outcomes to their own behavior rather than external events had higher credit scores than consumers with a lower level of knowledge and a locus of control that attributed outcomes in their lives to outside forces.

The study also found that the extent to which financial knowledge affects credit scores is dependent upon whether an individual has an external locus of control or an external locus of control.

 When we have conversations with new customers, we see that it is sometimes difficult for some who are faced with credit “challenges” to confront that fact.

Many of these people have had their credit damaged by tragic life events:  divorce, loss of employment, medical crises…all these events can and do negatively impact peoples’ credit. It is not pleasant to go back and visit those dark times. For many of these folks, the decision to confront their credit is a very emotional one.

Part of our company’s credit repair process is to help you put these situations behind you, but we also strive to help educate our clients about how their own internal behavior may have caused or contributed to the damage.

We strive to help you put your credit challenges in your “rear view mirror”, but we also educate you so that you control your scores into the future.

Give us a call today and let us help get you moving forward on the road to credit restoration and financial success.

What You Need to Know About FICO 10 and 10T

It may have escaped your attention while you were working from home as a result of the corona virus pandemic, but FICO released its newest credit scoring models in recent months.

FICO (Fair Isaac Corporation) is the producer of the most commonly used credit scoring algorithms. Some version of a FICO score is used in 90% of the lending decisions made in the United States.

These new scoring models will look at information like your account balances over the last two years and personal loans that you may have taken out in much more detail than previous scoring models.

If you apply for credit from a source that is using FICO 10, your score may be about 20 points different from what it had been under previous scoring models.

If you’re looking to get out of wherever you have been sheltering during the pandemic and looking to become a new homeowner, the new scoring model is not likely to have any impact on your ability to secure financing for that new residence.   Mortgage lenders  are conservative and most are still utilizing FICO credit scoring models that are several years old.

Here is a link to recent Newsday article where our company President comments on the new scoring models use in the mortgage industry:



It’s Rarely In Your Interest To Cancel A Credit Card

Is there a credit card in your wallet that you haven’t used in years? Have you wondered about whether you should “just cancel it” and make more room for your other cards?

Will getting rid of the card impact your credit scores? Probably so.

Closing an old credit card account can impact your credit scores in two ways. The first is that it will likely reduce your average credit history.

About fifteen percent of your credit score is based upon your credit history. Closing a card with a long history will certainly reduce the average age of your accounts and will drop your scores.

Closing a card account will also likely impact your credit utilization. Credit utilization makes up about thirty percent of your credit score.

What is credit utilization?

In its simplest terms, it’s the relationship of the outstanding balances on your account to the available balances on those accounts.

Think of it as a fraction:        Total of Balances on Your Credit Card Accounts/Total Limits on Those Same Accounts=Credit Card Utilization.

If you close a card with a high limit, it will drop the bottom part of that fraction and result in a drop in your utilization.

Here is a link to recent article from Fox Business News where they talked to our company President and solicited his suggestion about what to do with those old cards:


On September 21, 2018, the U.S. Department of Homeland Security (DHS) proposed changing how it determines whether an alien is inadmissible to the United States under section 212(a)(4) of the Immigration and Nationality Act (INA) based on whether he or she is likely to become a public charge at any time, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status. Aliens who seek adjustment of status or a visa, extension of stay, or who are applicants for admission, must establish that they are not likely at any time to become a public charge, requiring them to demonstrate that they have not received, are not currently receiving, nor are likely to receive, public benefits. The consular officer or the Attorney General at a minimum considers the alien’s age, health, family status, assets, resources, and financial status; and education and skills.

Under current regulations, the burden of demonstrating that the alien is not likely to become a public charge typically falls to the sponsoring United States relative, who must complete and file an Affidavit of Support.

The INA does not define the term “public charge.” DHS is proposing to define a public charge as an alien who receives one or more public benefits, as defined in 8 CFR 212.21(b). DHS is proposing to consider whether the alien has received since obtaining the nonimmigrant status he or she seeks to extend or to which he or she seeks to change, is currently receiving, or is likely to receive public benefits as defined in the proposed rule, when adjudicating an application to extend a nonimmigrant stay or change a nonimmigrant status.

As noted, one of the elements in analyzing whether an alien is likely to become a “public charge” is the alien’s “financial status.” When reviewing whether the alien has any financial liabilities or past reliance on public benefits that make the alien more or less likely to become a public charge, DHS is proposing to review an alien’s credit histories and credit scores, among other things. Part of this proposal would add the burden of completing and filing a new form, the proposed Form I944, and would require applicants to bear the cost of obtaining a credit report and credit score from any one of the three major credit bureaus in the United States and submit it with the application.

As also noted, DHS also proposes that the United States Citizenship and Immigration Service (USCIS) would consider an alien’s liabilities and information of such liabilities in a U.S. credit report and score as part of the financial status factor. Not everyone has a credit history in the United States. Nevertheless, a good credit score in the United States is a positive factor that indicates a person is likely to be self-sufficient. Conversely, a lower credit score or negative credit history in the United States may indicate that a person’s financial status is weak and that he or she may not be self-sufficient.

Credit reports contain information about a person’s bill payment history, loans, current debt, and other financial information.Credit reports may also provide information about work and residences, law suits, and bankruptcies in the United States. A U.S. credit score is a number that rates a person’s credit risk at a point in time. It can help creditors determine whether to give the person credit, affect the terms of credit the person is offered, or impact the rate the person will pay for a loan in the United States.

U.S. banks and other entities use credit scoring to determine whether a person is likely to repay any loan or debt. A credit report takes into account a person’s bill-paying history, the number and type of accounts with overdue payments, collection actions, outstanding debt, and the age of the accounts in the United States. USCIS would generally consider a credit score characterized as “good” or better to be a positive factor as it demonstrates an applicant may be able to support him or herself and any dependents assuming all other financial records are sufficient.

A “good” credit report is generally near or slightly above the average of U.S. consumers, and therefore the person may be self-sufficient and less likely to become a public charge. A poorcredit report is well below the average of U.S. consumers.

The absence of an established U.S. credit history would not necessarily be a negative factor when evaluating public charge in the totality of the circumstances. Absent a U.S. credit report or score, USCIS may give positive weight to an alien who can show little to no debt and a history of paying bills timely. An alien may provide evidence of regular and timely payment of bills, and limited balances on credit cards and loans. In addition, USCIS would not consider any error on a credit score that has been verified by the credit agency in determining whether an alien is likely to become a public charge in the future.

In any event, and in anticipation of the entry into force of these proposed regulations, any alien who is intending to apply for a visa or to adjust status should consider his or her credit score and how it can have an effect on the adjudication of the immigration application, and should try to take those steps necessary to improve his or her credit history and score, to the extent possible.

In light of these proposed changes, what steps can an applicant take to improve his or her credit history or score? The first stepis to obtain a current and complete copy of your credit report. There are many sources available to obtain this information. By law, you are entitled to obtain a free copy of your credit report every 12 months. The site to obtain this information is:, which will provide you with current copies of your credit histories, as maintained by the three national credit bureaus, Experian, Equifax and Transunion. The site will not provide you with your credit scores. If you want to obtain your scores here, the credit bureaus will charge to provide them to you. They are not inexpensive.

It may be a better option to obtain your credit scores from a consumer credit monitoring site. For example, you can obtain your credit score from Experian at a site Be aware that these sites sometimes utilize different scoring models to calculate your credit score. The two most commonly used scoring models are called FICO and Vanguard. If you are looking at your score to monitor whether it is going up or down, it doesn’t really matter which of these scores you look at, just be certain that you are comparing your scores from the same scoring model. (In other words, compare your FICO score only to another FICO score and your Vanguard score to another Vanguard score)

Vanguard scores are utilized on one of the most popular sites for free credit monitoring, credit karma. You should be advised that Vanguard scores are oftentimes as many as sixty points different than an individual’s FICO score. This is important because FICO scores are the scoring model most frequently used by lenders and accordingly, are the scores likely to be utilized by the USCIS.

Once you have obtained a copy of your credit report, the second step is to review it closely. Oftentimes, items appear on individual’s credit reports that do not properly belong to them. If this happens to you, you have a right to dispute such improper items with the credit bureaus. Be cautious about how you dispute these items, the credit bureaus will offer you the opportunity to dispute these items online but doing so may result in your waiver of important legal rights.

Reviewing your credit report may reveal accounts that you owe. Be careful when addressing these accounts, paying them off does not necessarily boost your credit scores like you may expect them to. Entering a payment plan on older accounts could also potentially retrigger the statute of limitations on the account, allowing you to be sued when such suit had previously been time barred.

If you don’t have and use a credit card, the American credit scoring models make it difficult for you to have a high score. What if your credit score isn’t high enough to qualify for a credit card? You may want to investigate a “secured credit card.” These cards allow you to make a deposit into an account, which “secures” any charges you make on the card. These cards typically do not require a good credit score, and in fact the card issuer ordinarily doesn’t even look at your credit.

The third step, and perhaps most important, one of the keys to a healthy credit score is paying your bills on time. Late payments on mortgages, auto loans and credit card bills will seriously damage your credit score. If you find yourself in a “cash crunch” prioritize these bills. Other bills, like utility bills, cell phone bills and rent typically do not report to the credit bureaus, unless and until they are sent to collection. If you need financial breathing room, you may be able to delay payment of these types of bills for a short period of time. (Just be sure that you don’t let them go into default status where they will be sent to collection.)

Credit scoring is “forward looking.” You may have to clean up some older derogatory items on your report, but if you start today with timely payments and proper card utilization, you can begin to grow your scores in a positive direction.

There are companies that can assist you with growing your scores and understanding the credit scoring process. They can help you to avoid some of the potential pitfalls discussed above.Make certain that you are diligent in researching these companies before choosing one to work with. Look for a company that has been in business for five years or more and has well credentialed employees. Be cautious with big “internet” credit repair companies. Often all that they do for you is repeatedly send letters to the credit bureaus, they don’t provide you with education about the credit scoring models or give your credit issues proper individual attention.

Richard Hein (@STLLawyer) is a bilingual (Spanish/English) immigration lawyer in Saint Louis, Missouri, and Board Member of International Law Firms, an international association of highly regarded law firms with member firms in more than 70 cities and 50 countries worldwide. Rick regularly provides legal analysis on domestic issues of international interest, and has appeared on CNN enEspañol, Voice of America, Radio France International, Deutsche Welle, Univisión, NTN24, El Clarín (Argentina), and TeLoCuento News (Caracas).


Charlie Scanlon (@123pccStL) is a lawyer, public speaker, consumer credit expert, and President of Phoenix Credit Consultants, a nationally recognized credit repair and restoration company in Saint Louis, Missouri, and General Counsel for Commencement, LLC, a student loan debt counselling company. Charlie frequently writes on the subject of credit and the laws that govern it; he is well versed in the Fair Credit Reporting Act, The Fair Debt Collection Practices Act and other legislation that impacts the proper reporting of consumer credit.

Holiday Credit Tip Sheet

Holiday Credit Tip Sheet


Credit Cards and Credit Card Utilization


One of the primary factors that go into computing your credit score is “Credit Card Utilization.”

In its simplest terms, credit utilization is a fraction. The amount of credit that you have available to you on credit cards is the bottom half (or denominator) of that fraction. The amount of credit that you have used is the top half (or the numerator) of that same fraction.

For example, if you have $1,000.00 dollars worth of credit available to you and you charge $500.00 on the credit card or cards that you own, your resulting credit utilization rate is 500/1,000, or 50%.


If you don’t pay any portion of that 50% off when your bill comes after the holidays, your credit utilization rate will be computed by the credit bureaus at that 50% rate. That level of utilization will damage your potential score. Not as bad as 75% utilization or 100% utilization, but it will leave significant credit scoring “points” on the table.

We want to help you build your score. If you’re hoping to get your score to a place where you can pre-qualify for a mortgage in the spring or summer-it is best that you spend only at a level that will allow you to pay your credit card bill down to 30% (or less) of its applicable limit BEFORE it is due next month.


In-Store Credit Card Offers

If you make a purchase at a national retail store like Target or Macy’s during the holiday season, it is likely that you will be offered a discount on your purchase if you apply for and use that store’s credit card when you checkout. The offer is typically something like a 10% or 20% discount on all purchases made on the day that you make the credit card application.

Offers like this can be very tempting. (That’s why the stores make them!)

But, think about the following:


  1. Research has shown that people tend to spend more money when they use credit cards in lieu of cash. The spending likely increases even more if you are given a “one day only”, limited time discount. If the 10% discount only applies to purchases made that day, you are very likely going to spend more money on that trip to the store than you had initially planned to.


  1. When you apply for a store card, it will show up as a “hard” inquiry on your credit report. Although the hit to your credit score will not be massive, you could potentially lose five or ten points. If you are planning on applying for a mortgage or auto loan in the next few months, those points could cost you a significant amount of money.


If you find yourself unable to resist the urge to apply for and use the store card, it bears repeating: be sure to pay the statement balance in full and on time BEFORE it is due. At the very least, pay the balance down to no more than 30% of the available balance.


  1.  Interest rates on store cards are high, often in the range of 20 to 25 percent. Surprisingly with these cards no matter what your credit score is whether it is 620 or 850, you will receive that same high-interest rate.


If you use the credit card to finance a big purchase, the cost associated with that high-interest rate would quickly eliminate any savings you received if you don’t pay the bill off in full upon its arrival. Finally, if you don’t pay all or most of that big purchase off before the interest becomes due, that high-interest rate can result in your credit utilization moving upwards very quickly, even if you don’t spend anymore using the card.


0% Interest”  Offers Oftentimes Aren’t Really 0%

When you are ready to buy something in a store, or online, you might be tempted with an offer of 0% financing. Pay close attention to exactly what you are being offered. Not all 0% offers are the same.


Sometimes the offer will “waive” the interest during a certain, set promotional period (for example, “90 days”).


Other times the offer does not waive the interest, but defers it, instead. If you fail to pay the balance in full during the defined time, the retailer may retroactively charge you interest for that full period. In that instance, you never received the benefit of 0% interest at all. You should only consider utilizing this type of offer if you can pay the balance in full BEFORE the expiration of the defined period.


Before signing up for any of these sorts of offers, “READ THE AGREEMENT”, make sure you understand whether the interest is being “waived” or “deferred.”

If At All Possible, Avoid Going Into Debt to Buy Gifts

It feels great to give gifts to the ones who you love during the holiday season. But, if your goal in the next several months is to grow your credit score to a point where you can qualify for financing for a new home, going into debt to buy those gifts can expose your credit score to damage and jeopardize the fulfillment of that dream.

Rather than going into debt, consider gifting alternatives. Everyone loves the gift of home-baked Christmas cookies. Think about giving the gift of your labor or of a special talent that you might be able to offer to others.

Feel free to share with your loved ones that your special gift to them is helping you to realize your dream of owning a home next year.


Consider Giving Your Friends or  Loved Ones the Gift of a Credit Restoration Expert in 2018

You may want to consider giving the gift of the services of a professional, reputable credit restoration company to help your friends or family along the path to better credit.

They may attempt to fix damaged credit issues on their own, but the process can be hard work. It will require their time, patience, diligence and perhaps some aptitude for understanding what the credit bureaus and collection agencies are required by law to do.

Should you choose to give this gift, we would like to chip in. Anyone who contacts Phoenix this month or in January of 2018 (314-429-2040)  and tells us that they found out about us through this Holiday Credit Tip Sheet will receive a $25.00 dollar discount on their initial first work fee, should they choose to engage our services. Feel free to tell folks that this discount it is your gift to them!