"2 year lookback"

[Anonymous]

I had heard somewhere that your credit is a "2 year look back" and that derogatory info older than that should not have an impact.  Is there any accuracy to this?   I ran a "what if" score simulator and paid off 4 medical collections 4-6 years old and the score simulator said I would go from 711 to about 800.  So I guess I am answering my own question.

also separate issue-

Has anyone noticed a change in any of the 3 scores when paying off a recent collection taking status from collection to paid collection.  I ran a simulator and Equifax went up significantly and the other 2 stayed the same.  Is it possible for a paid collection to raise equifax?

[llecs]

Where was this score simulator found?

[Anonymous]

Within "Credit Plus" the company that we use (as a lender) to pull tri merge reports when applying for a mortgage.

[llecs]

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@Anonymous wrote:

Within "Credit Plus" the company that we use (as a lender) to pull tri merge reports when applying for a mortgage.

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Ah gotcha...and I know they use FICO as part of a 3rd party service with your lender.

In general, it is said that 30 day lates stop impacting you after two years, and 60 day lates impact you less after two years, but any major derogs (CAs, COs, 90+ day lates, PRs, etc.) all impact you up through the full 7 years. For example, some here had BKs or CAs fall off at the 7 yrs and they've seen 20-50+ point gains.

Unfortunately, paying a CA will never help your FICO score. Paying a CO won't help either, but if the CO was a CC, then you could see an increase if util changes in your favor.

[Anonymous]

Exactly the info I was looking for!  Thank you.

[RobertEG]

Only one term is incorrect.  FICO is not a two-year "lookback,"  it is two-year risk analysis in a "look-forward."

It is basically a risk prediction, based on past usage of credit, or your liklihood of going delinquent on your committed debt within the next two years.

The severity and age of old delinquencies diminshes as a valid risk predictor of your liklihood of future default.  30-day lates are minor derogs, and have little predictive value on future risk after they get more than two years old.  IT is easy to go 30-days late.  A postal delay, writing a check one-day late, etc.  We all do that.

But two lates in row establishes a pattern.  Then things begin to get serious in the analysis of your concern with paying timely.

[haulingthescoreup]

A 30-day late doesn't count after two years, other than the notation that you had an account with a negative.

A 60 counts as a 30 after two years, although it keeps counting.

Everything else still hurts after two years, although the effects can soften some.

But read posts here by those whose last collection or whose BK fell off, and they report a 50 - 100 point score increase. Old serious negatives definitely do still count.