Can Your Credit History Just Disappear?

What do expatriates, prison inmates and people who’ve never had a credit card or loan have in common? While this question sounds like a joke setup, it’s not. These people all are at risk of seeing their credit records vanish into thin air, along with their credit scores.

Most negative credit information remains on your credit file for seven years, while positive accounts are reported for 10 years. But if you haven’t had any active credit accounts for that period of time, you may find your credit history has all but disappeared.

While it might not seem like that big a deal, there are ways that not having a credit score can hurt you.

Fortunately, if you’re worried about maintaining your credit records, there’s plenty you can do to avoid the hassle trying to re-establish credit.

Your first step will be to find out whether your credit reports are still active. To do that, you can request your free annual credit reports. You can also see credit scores using a service such as Credit.com’s free Credit Report Card. If you are told that no credit reports or scores are available, then you’ll know you are going to have to build credit as if you were just starting out. (You can read more about how to build credit here.)

If your reports and scores are still available, here are some simple steps you can take to ensure they don’t disappear.

Living Abroad

If you’ve been living in a foreign country for several years and closed out all of your U.S.-based credit cards and loans, your credit history could be steadily fading. That’s because your credit reports only report U.S.-based credit. Different reporting systems and privacy laws specific to each country don’t permit an American’s credit history to follow them to other countries.

That’s why, if you plan to return to the United States, it’s a good idea to maintain an active American credit card account that you use for a couple of routine purchases each month. Choose a card without foreign transaction fees and pay balances in full to build credit without acquiring debt.

And if you bank with a multinational bank, you may be able to transfer your credit card accounts to the bank’s U.S. division, which would be reported in a U.S. credit history, according to Kristine Snyder, an Experian spokesperson.

Being In Prison

Being incarcerated doesn’t necessarily remove you from the credit reporting system, but maintaining your credit while you are in prison can be difficult. If you have a joint account with a spouse or relative, and they continue to use the card and pay the bills, then those credit references will continue to be reported on your credit reports and help you maintain credit.

According to a study titled “Collateral Costs” by the Pew Charitable Trusts, “more than two-thirds of male inmates were employed and more than half were the primary source of financial support for their children” before they were jailed. That means many inmates and their families suffer financial hardships that may not make maintaining good credit possible.

And prisoners can be at a higher risk of identity theft as well, which is why it’s a good idea for inmates to check their credit reports. Any prisoners who want to review their credit reports while they are in jail will need to get a letter signed by prison administration verifying they are a resident of that facility.

Only Using Cash

If you once had credit, but because of a debt management program or other reason you decided to cut up all your credit cards and just use cash for the last several years, you might’ve lost your credit records.

Fortunately, one of the easiest ways for folks with cash on hand to establish credit and get a credit card without credit is to start with a secured credit card.

Re-Establishing Credit

“Something else they may want to consider is asking someone with a strong credit history to cosign for them,” Snyder said. “If a person cosigns on their behalf, he or she is accepting equal responsibility for the loan or credit line.”

Once you’ve established a long enough history of on-time payments on your secured card, you can “graduate” to a credit card that can help you build credit — check with your issuer for guidelines.

Using credit again is the first step. But you will need the following to have a credit score, according to FICO:

At least one account that has been open for six months or longer
At least one undisputed account that has been reported to a credit reporting agency in the past six months

(Not sure where your credit stands? You can get a free copy of your credit reports once a year from AnnualCreditReport.com. You can also see two of your credit scores for free on Credit.com every month.)