How Long Can a Negative Item Stay on Your Credit Report?

So, you have been following our advice and taking a look at your credit report once a month? Good job, you’re to be commended!

You may have noticed that there are accounts on your reports that are negatively impacting your scores.

How long can those negative items stay on your report and cause you angst?

The answer is “a little complicated.”

It depends. It depends on both the type of negative item that is reporting and the date that the account was last active before a negative event (most frequently a late payment) happened.

The Fair Credit Reporting Act defines the date of first delinquency as the date at which you first became late and then never brought the account current before the creditor decides to charge it off or send it to collections.

So, an account can be late, and then brought current. Bringing it current causes the late payment, or payments, to be ignored when it comes to establishing the date of first delinquency.

In order to establish a date of first delinquency, the account needs to be late and stay late, at least until it is charged off or sent to collections. Make sense?

Creditors typically charge off accounts or send them to collections after they have been delinquent for 180 days (Six months).

A consumer’s credit reports are allowed to report negative entries about a delinquent debt for up to seven years after it became delinquent, or up to seven years after it is charged off or sent to collections (In which case it is going to appear on your credit report for seven-and-a-half years after the date of first delinquency.) Any negative information about an account that is reported beyond this time period can, and should, be properly removed.

Some negative items on your credit report, like bankruptcy filings,  are allowed to remain on your report for a longer period of time. The length of time bankruptcy stays on your credit report depends on the type of bankruptcy, but it generally ranges between 7 and 10 years. Some people refer to bankruptcy as the “credit score killer,” as it can immediately knock 130 to 150 points off your credit score.

The shortest lived negative items on credit reports are hard inquiries. Hard inquiries are credit pulls that are done by a creditor to use in a decision whether or not to offer you financing. These inquiries typically only cost your credit scores a few points, but they. can add up if you have a number of them.  Fortunately, these items only remain on your report for two years from the date they are made. Even more fortunately, they only impact your credit scores for six months after the date they are made.

Once the time allowed for a negative item to report expires, it should automatically come off of your report. If it doesn’t, a company like Phoenix Credit Consultants can help you to have it properly removed.

It is important to keep in mind that the fact that the period of time allowed for an item to report on your credit has expired, does not necessarily mean that you are no longer legally obligated to pay that debt. A creditor can sue you up until the statute of limitations in your state for the debt has expired. Sometimes this period of limitations is longer than the period the debt is allowed to report, sometimes it is shorter.

Have questions? Give us a call (314) 429-2040.