The information listed below is from source material supplied by Mike McNamara of United One Resources. We feel it’s important to discuss credit scoring as lending requirements continue to be more restrictive as credit markets continue forward with caution.  Mortgages can be denied over 5 points on a credit report, so it’s important for potential homeowners to become curious about their credit report and improving credit scores.

This article will address the following:  (A)  Credit Scoring  (B)  Steps for Improving Credit Scores  (C) Statute of Limitations  (D)  Useful Websites


These are the variables which create a credit score:

(1)  Payment History:  35%  Delinquencies within 2 years have a higher score deduction than older items.

(2)  Current Debt:  30%  This score is based on outstanding balances and available credit.

(3)  Credit History:  15%  This is the amount of time credit has been established.

(4)  Credit Types:  10%  A mix of credit types is considered favorable. Such as mortgages, credit cards, and car loans.

(5)  New Credit:  10%  Outstanding purchases without a payment history have a higher point evaluation.

NOTE:  Credit inquires can cost credit deductions of 3% to 15% for each inquiry.

These are the top 5 reasons credit scores are penalized:

(1)  Current accounts are past due.  This has the highest point deduction of all reporting.  We were advised of past cases where a current past due account cost the mortgage applicant 100 points on his credit report over a dispute of $35.

(2)  Derogatory trade lines (recent late payments on active accounts).

(3)  High balances on unsecured debt (credit cards).

(4)  Unpaid bills leading to public records information.  Any legal actions as a defendant in cases involving  a warrant in debt, income garnishments, etc.

(5)  Lack of open active trade.  Such as the continued use of credit card(s).

These are the results of a study conducted by U.S. Public Interest Research Groups related to credit reporting mistakes:

(1)  79% of all credit reports contain errors.

(2)  There is a 25% chance your credit report has an error serious enough to be denied credit.

(3)  54% of personal information was out-dated, belonged to someone else, or was otherwise incorrect.

(4)  30% of credit reports incorrectly listed closed credit accounts active.


(1)  Negotiate with creditors.  Request a one-time removal for a late payment if the account has a favorable payment history.

(2)  Negotiate with collection agencies.  When a settlement is offered, counter the offer before payment by requesting the removal of the account from records.

(3)  Pay down or completely pay off revolving debt.  It is important to get these balances below 50% of the credit limit.

(4)  Student loan late payments.  Check reported late payments for any periods when the loan was considered in deferment (postponed payments) or granted forbearance.  If late payments were reported incorrectly, contact the lender and ask for removal.

(5)  Installment loans.  In terms of credit scores, paying off or paying down these loans have little impact in most cases.


(1)  Bankruptcies:  Reports stay for 10 years from the filing date.

(2)  Legal Judgments:  Open judgments last 12 years.  Paid judgments last 7 years from the date of entry (regardless of the date paid).

(3)  Liens:  Open liens stay on a report as long as it is filed against the consumer.  They stay on a report for 7 years from the date of satisfaction.  This applies to all liens.

(4)  Collections & charge-off accounts:  Remains for 7 yrs. from the date placed on collection regardless of payment date.


(1) – You’re entitled to check your credit report once a year for inconsistencies without penalty, and free of charge(s).  This report will show the current scores and credit history maintained by the 3 major credit reporting agencies; Experian, Equifax, & TransUnion.

(2) – Register here to stop credit card junk mail, and offers from insurance agencies.

(3) – Register here to avoid all automated calls.

(4)  Websites for credit reporting agencies:

For questions related to improving credit scores or anything real estate, please feel free to contact Dwayne or Maryanne.

Dwayne and Maryanne

Dwayne & Maryanne Moyers, Northern Virginia Realtors. Providing knowledge, experience, availability, hard work and dedicated client services for buyers and sellers in the residential real estate industry. We get it done!


About the author: Dwayne is a Realtor, and Maryanne is a real estate broker.  They serve residential real estate clients in Northern Virginia (Fairfax County, Prince William County, Stafford County, Fredericksburg, Spotsylvania County, Fauquier County, Manassas, and Manassas Park).