When reviewing your credit report (get a free copy here), you will notice that by each tradeline there is a note that says DLA (date last activity). This mark basically states the last time there was any activity (a payment) on each tradeline.
Why is DLA important – good credit?
Credit models, like Fico, will only factor in positive tradelines that are active. You may have a credit card account that is 10 years old, but if you have not used the account within the last six months then Fico may consider it inactive! This will cut out the positive account from helping you add points to your credit score!
There may be times when you are using a credit card or some other tradeline every month, but for whatever reason the bank is not updating the tradeline to the credit bureaus. This will be leaving you with a DLA that is not accurate. This may have a significant impact on your credit score. So if you find a non-accurate DLA on your credit report, reach out to the issuer and make sure they update it ASAP.
Why is DLA important – bad credit?
DLA is also very important when it comes to negative tradelines. A bad mark on your credit report, like a collection, may only be reported on your credit report for up to 7 years (bankruptcies may be reported for up to 10 years.) The clock starts ticking from when the last activity on the account that caused the account to go into collection took place.
For example, if you stop making payments on a credit card account, then about 120 days later the account will be charged off. After some more time (it can be anything from a few months to a few years, depending on the issuer) the account will be sold for collection. Any bad marks, though, including all the collection marks may only be reported on your credit report for 7 years from the date of your last payment.
There are collection companies that may change the DLA on a collection to a more recent date and by doing so, they try to keep the negative account on your report for longer. This is called re-aging and it is illegal. So make sure that whatever date is stated on your credit report as the DLA is the same date you’ve paid the bank the last payment.
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