Credit Reports & Credit Scores: Is There Such a Thing as a Fresh Start?

Posted by Alesha Struthers Jan 13, 2021

Credit reports and credit scores are more important than ever before. The health of your credit report and your credit score no longer only affects whether you will receive a car loan at a good interest rate or whether you will be approved for a mortgage. They also affect what you pay for insurance and whether you will be offered a job in certain industries. The beginning of the year often brings with it dreams and hopes of things to come. For many, it also comes with the realization of too many credit card bills, unpaid personal loans, and no job prospects during the second year of the global pandemic.

Yet, despite how dependent our lives are on credit reports and credit scores, there are a lot of questions surrounding them. What is a credit report? What is a credit score? How can someone get a free copy of their credit report? How long do late payments stay on your credit report? Do medical bills show up on credit reports? What can someone do if they have bad credit? Is there such thing as a fresh start? In this article, the Law Offices of Alesha Struthers will provide answers to these questions.

Please note that this post is educational and informative in nature and is not a substitute for legal advice. If you would like legal advice about options related to the debt listed on your credit report, schedule your free consultation with the Law Offices of Alesha Struthers now!

What Is a Credit Report?

A credit report is a documented history of your open, revolving, and closed credit accounts. It may include, and is not limited to:

  • Car payments
  • Personal loans
  • Credit card payments
  • Medical bills
  • Rent and mortgage payments
  • Buy here, pay here lease and purchase agreements (including furniture, electronics, appliances, and vehicles)
  • Child support and alimony
  • Tax debt
  • Judgments (such as wage garnishments)
  • Utility payments (including whether service was shut-off for non-payment)
  • Cell phone contracts

A credit report includes on-time payments, late payments, and missed payments. It also includes open accounts, revolving accounts, closed accounts, and accounts in collection. A revolving account is an on-going account. For example, if you have a department store charge card, it is a revolving account.

Your credit report is used for many purposes. Potential creditors may check your credit to determine if they will give you a car loan, a mortgage, or a personal loan. Insurance companies pull your credit report to determine the rate that you'll pay. That may seem unfair since it isn't based on actual risk factors, but they use it nonetheless. A credit report may also be pulled by potential employers in certain industries. If you need security clearance because you are in the military or because you are a federal contractor, your credit report will also be pulled.

What Is a Credit Score?

A credit score is a number between 300 and 850. The closer your credit score is to 850, the better interest rate you will get because you are considered a better credit risk. There are several factors that go into how to calculate a credit score. Based on your overall credit history, your credit score is calculated by examining:

  • The number of open accounts you have
  • The total amount of your debt
  • The amount of your income that is reported
  • Your repayment history
  • The types of credit you have
  • The length of time your accounts have been open

The three main credit bureaus, Experian, TransUnion, and Equifax, may each have a different credit score listed for you. This is common. However, the three scores should be close.

How Can Someone Get a Free Copy of Their Credit Report?

Because a credit report is so important, it is important for you to understand how to get a free copy of it. All three credit bureaus offer a way to get a copy of your credit report. It is important to read the page carefully to make sure that you are not signing up for something that will charge you for credit monitoring (unless, of course, you are interested in receiving that service).

Each year, you are entitled to receive a free copy of your credit report. To get your free credit report, visit You are also entitled to receive a free copy of your credit report if you apply for credit of some kind and you are denied. When this happens, you will generally receive a letter in the mail from company that denied the account with instructions on how to obtain a copy of your report. This can be very beneficial if you believe that you have good credit and a mistake was made in denying you credit.

How Long Do Late Payments Stay on Your Credit Report?

Late payments are one of the most common issues that negatively impact credit reports and credit scores. According to Equifax, late payments stay on your credit report for up to seven years from the date that you missed the payment even if you pay the past-due amount, pay off the balance, or pay off the balance and close the account. While a potential creditor may be willing to overlook one or two late payments if you have a great credit report and great or good credit score, multiple late payments can damage your credit report and lower your credit score. It can mean that you pay a higher interest rate, get denied when you apply for credit, pay more when it comes to insurance, or, in some instances, not get hired for the job you really want.

Do Medical Bills Show up on Your Credit Report?

Yes, medical bills that go unpaid or that are paid late when you make arrangements on them will show up on your credit report. They are considered unsecured debt. As you learned in the last section, late payments negatively impact your credit report and your credit scores. Regardless of the pandemic or another unexpected illness or injury, medical bills on your credit report don't just impact your personal life. They can impact your future.

What Can Someone Do If They Have Bad Credit?

If you have bad credit, you have some options.

  1. Pull a free copy of your credit report and put together a budget. Depending on your financial ability, you may decide that you want to pay off what you owe to improve your credit. There are many financial experts who have articles available for free that explain how they went about getting debt free in their own lives. The Law Offices of Alesha Struthers renders no opinion on any of their methods. We are simply stating that it is one option you may wish to consider because, at the very least, it is important to pull your credit report to see where you stand as well as to establish a budget so that you are better able to keep control of your finances.
  2. Get credit counseling from a trusted debt and credit counseling agency. The Washington State Office of the Attorney General website provides good information about both debt relief and credit counseling that you should read before choosing a credit counseling agency. A credit counseling agency can help you establish a budget and get your finances back on-track. Some also provide debt consolidation services that are considered non-profit, meaning they do not make any sort of profit from helping you.
  3. Consider settling with your creditors on your own. This solution is not for everyone. If you have late payments or you've stopped paying on certain debts all together, some of your creditors or debt collectors may be willing to settle with you. They may believe that receiving something on what is owed is better than nothing. If this is what you choose to do, you need to get the settlement offer in writing. You should not give the creditor or debt collector access to your bank account. You should have the full amount of what you have agreed to pay ready to send as a certified check or cashier's check through certified mail with return receipt requested. You should also keep a copy of all documentation and the proof that you paid the debt. It may be required in the future.
  4. Consider filing for Chapter 7 bankruptcy. There are many misconceptions about filing for Chapter 7 bankruptcy. One of those is how doing so will damage your credit. While bankruptcy does show up on your credit report, so do late payments and missed payments. If your credit report already has missed payments and late payments, you would be surprised at how much good that a bankruptcy could do for you in the future.

Is There Such a Thing as a Fresh Start?

For many, there is such a thing as a fresh start when missed payments and late payments damage their credit, even when it comes to improving their chances of getting their dream job or qualifying for better insurance rates or interest rates in the future. Ultimately, the choice about how to obtain that fresh start for a new financial future is up to you. To learn more about your options, schedule your free consultation with the Law Offices of Alesha Struthers now!

Disclaimer: This publication is not legal advice. It is intended as legal information only. For legal advice specific to your needs, contact the Law Offices of Alesha Struthers, PS at 800-972-0411.

Posted January 2021