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Credit & Finances

How Long Does Negative Information Stay On My Credit Report?

Jackie Hug, Senior Defender
November 21, 2020

How Do Credit Bureaus Get My Information?

Creditors, lenders, collectors, and other debt holders that you have accounts with typically report to one or more of the 3 major credit bureaus. Some will report only negative while others will report positive and negative activity to the bureaus. Your account vendors generally report electronically every month, though some will report every 45 days or another interval they choose. In fact, they don’t have to report anything at all! If they choose to report to one or more bureaus then they must follow the Fair Credit Reporting Act (FCRA). The credit bureaus then turn around and update the information they have on file. There are also public records, such as bankruptcies and evictions, reported on credit reports, which a third-party company typically passes onto the credit bureaus.

When Does Negative Information Come Off My Credit Report?

How long an item can stay on your credit report varies by the type of account as well as federal and state statute of limitations. These statutes of limitations determine when an account must be removed from your credit report. Once the statute of limitation has expired, the item must be deleted from your credit report according to the Fair Credit Reporting Act. Just because an item is reported to a bureau, that doesn’t mean it’s legally reported. This is the basis of removing negative items from consumer credit reports, which is one of the strategies to improving credit.

Federal Statute of Limitations

Late Payments

Once you become more than 30 days late on any of your bills, the financial institution that you hold the loan with will typically disclose your late status to one or more credit bureaus. If you have a good history with the creditor and the late payments happened under unusual circumstances, they will likely avoid reporting a late payment if you ask. You can be reported as either 30, 60, or 90 days late, and by law, the late marks can remain on your credit report for up to seven years.

Inquiries

Your report is queried when you when you apply for a credit card or loan, which results in a hard inquiry. Hard inquiries can have a negative effect on your credit report and score. It’s recommended to keep hard inquiries to 2 or less per year. Each additional hard inquiry might affect your credit score 5-10 points per additional inquiry. While inquiries can stay on your report for 2 years, the leading score model, FICO, only considers the last 12 months.

Charge-Offs

These are debts that the creditor felt that they could not collect on anymore after 180 days, so they charged them off as a bad debt. However, the creditor can still sell the account to a third-party collector for collection purposes.

Judgments

Judgments are issued by courts as a result of a law suit. They can be from anything from failure to pay income tax to personal injury lawsuit to failure to pay a debt as agreed.

If a creditor or collector takes you to court and sues for a judgment, this destructive item will be placed on your report. Judgments are a big burden that can cause many problems, because they can result in wage garnishment and even get tied to personal property, such as your home, preventing the sale of the house without the judgment being paid. The courts issue judgments that can stay on your report for up to seven years, but most judgments can be renewed until it is paid or until it reaches the 20-year mark.

Child Support

This is public record and often gets added to your credit report even if it’s in good standing. Child support often affects your DTI (debt-to-income ratio) and can stay on your report for up to seven years.

Foreclosure/Repossession

Foreclosures take place when you default on your home mortgage and the bank takes the house back. Repossession is for other items, such as cars and rent-to-own furniture. Repossessions happen when you can no longer pay on the item(s) and the lender confiscates the vehicle without your permission. Both create negative marks that will remain on your credit report for seven years.

Tax Liens

Another type of public record that will find their way into your credit report if you default on your tax liability with the IRS. Paid tax liens will stay on your credit report for seven years, but while owed, they can remain on your record forever.

Collections

If you see an old account on your credit report under the collection trade line, this is a bill that was sold or assigned to a collection agency. It was passed onto the collector from your original creditor because you didn’t to pay for an extended period of time. These debts can legally stay on your credit report for up to seven years. It’s important to note that you cannot be sued for these debts after the state statute of limitations has expired.

Bankruptcy

Your credit report will list the date you filed for bankruptcy and the time it was discharged. A Chapter 7 bankruptcy can remain on your credit report for ten years, and a Chapter 13 bankruptcy can remain on your credit report for seven years. Many credit repair companies and people believe these cannot be removed from credit reports. Federal law and our experience prove otherwise.

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