Credit Score Q&A: Length of Credit History vs. Late Payment History

Published

August 23, 2011

Tom Quinn is Vice President of Scores at FICO (Fair Isaac), and has more than 25 years of experience in the credit industry with previous positions at FICO, Nomis Solutions, MDS (now known as Experian) and Citibank.

Steve from Denver had an interesting question. He recently pulled his credit report for the first time and was surprised to see that a 60-days-past-due late payment was showing on a credit account that he never recalled opening. The late payment being reported was posted six years ago and Steve stated that he has no other late payment history and carries low balances on his credit cards.

Steve does not think he ever had this card, and if he did he is certain the late payment never happened, and the information is being reported inaccurately. However, he also noted that the account in question was opened more than 25 years ago. He is wondering whether he should dispute the item and get it removed or just let it be as it will be purged from his report once it reaches seven years. More specifically, is he benefiting (in terms of credit score points) from the long time in file (length of credit history) associated with the 25-year-old date open, despite the points being lost for the historical late payment?

To address Steve’s specific question, I recommend he get a copy of his credit report, credit score and score factors that will inform him as to what information is having the biggest impact on his credit score. Up to five score factors are provided with the score, and these indicate the top reasons the score is not higher. If the top score factors are related to missed payments/presence of delinquency, that means that category of information is accounting for the greatest number of points lost.

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My more general response is that Steve should make sure his report is as accurate as possible, and that means he should dispute the inaccurate information. He should push to have the account removed from his file if he never opened this account. My experience is that strategies like the one he is contemplating to try and “game” the score for an increase in points usually backfire and have no impact. They could even potentially decrease the score.

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