We have already revealed how your credit history makes up your credit score and thus is usually the main indicator in determining your credit worthiness. So this would tend to lead to the conclusion that all of your credit history in particular the last 7 to 10 years would be what is of concern. While this is true for the most part, what is even more important is your last year or two with regards to your credit history.
The reason is simple, lets say that 5 years and beyond you had some really bad financial mishap and you where not paying back credit cards and other things to negatively affect your credit. Then the last 2 years you have not only cleaned up your bills/ late payments etc. To add to this argument lets say you also got a good job. You can see that a creditor would probably see that your situation has changed considerably from years back and thus you would probably gain more favor. Even if you have had something considered really negative such as a bankruptcy, this too can often be overlooked it your situation now has greatly improved. Now you probably will not be given the best rates available, but it could make a few points difference in interest or even make the difference of obtaining credit or not period.
This also common sense approach also is true for any bad credit points you have on your report now. Do not give up hope if your credit just looks too bad. If you can fix things up the next year or so it could look very good on your credit history. There have been situations where someone has had to declare bankruptcy but after this point, they have really worked on cleaning up their credit. After a year and half, they where able to obtain a small loan for a car. They where diligent in making the payments which in turn helped their credit report. They then where capable of putting their car up as security towards more credit for other things in life. So don’t give up if you currently are challenged with regards to credit. Start good credit habits and you can help turn things around in less time than you may have realized.
This same principal can be allied to outstanding debts. Debts you have obtained from years ago may not affect your credit report quit as bad as recent ones. Although it is ultimately your responsibility for paying back the money you owe, paying off the more recently obtained debts is often advised due to this reason. But don’t be fooled, old debts can still haunt you and if you where for example looking to purchase a house, I doubt any bank would issue you any substantial credit if you have old debts that have gone into collection still within the seven year window.