Credit Reporting Limits for States

While no one particularly enjoys having negative items on a credit report, state and federal limits exist for most reportable items. After a certain length of time has passed, credit reports cannot list certain negative credit items. In some cases, such as with unpaid taxes, the negative credit reporting has no statute of limitations.

Types

While each state has its own statute of limitations dealing with debt, there are two different areas addressed in the statutes. One area deals with actual debt collection. Debt collectors can sue for payment of outstanding debts up to a certain period of time. Once the statute of limitations expires, the debt collection can no longer sue a borrower. This does not mean the debt collector must stop trying to collect on the debt. The debt collector can attempt repayment indefinitely, but once the statute of limitations passes, the collector is unable to pursue a legal recourse. The other type of statute of limitations is on the credit report. In most cases, most states do not list bad credit items beyond the federal statute of limitations, which is usually seven years.

Written Contracts

A written contract is a legally binding covenant between a borrower and a lender. Typically, written contracts have a better likelihood of being upheld in a lawsuit, since there is actual physical documentation available. In most cases, the reporting limit for a written contract being reported is anywhere from two to 10 years. In some cases, such as with the state of Colorado, the written contract reporting expires after six years, but can be renewed every six years. Most states do not have a policy of renewal.

Open Accounts

States impose their own limits on open accounts. Open accounts usually include credit card accounts, as well as vendor accounts. An open account is an account with a balance remaining unpaid by the borrower. Some states, such as Alabama, have open account credit reporting limits of three years. However, whenever activity takes place on an account, the state credit reporting limits usually reset to the date of the latest activity. If an account is going to expire in November of 2011 and a small payment is made in October of 2011, the time limit commences once again starting in October of 2011.

Tax Liens

In most cases, when it comes to unpaid taxes, states do not limit the length of time the credit reports list the debt. This holds true for local taxes, state taxes and federal taxes.