Your credit report is the financial equivalent of your good name, and it is important that it shows you in the best light possible. Having a number of positive entries on your report will help, but you also do not want any negative entries. Bad things can happen, however, and you may end up with late payments or collections, or even worse on your credit report.
Late Payments and Collections
Late payments are one of the most common negative entries on a credit report. Each individual creditor reports your account as either current or past due. They also report how many days the account is past due. After an account becomes over 90 days late, it is usually shown as a collection account. Negative information such as this appears on a credit report for seven years. The report also shows how many times since the account has been opened up to seven years that you are past due.
Public Records and Tax Liens
Public records are treated differently on your credit report. They are placed in their own section and are never positive records. Examples include judgements that creditors have received against you, and also tax liens, both paid and unpaid. Unpaid tax liens can stay on your personal credit report for up to 15 years. A judgment can remain for 10 years if it is not paid, and seven years after the judgment is paid. An unpaid judgment can be renewed for one 10-year period as well for a total of 20 years.
Bankruptcy
A bankruptcy's treatment depends on if it is a Chapter 7 total liquidation bankruptcy or a Chapter 13 wage earner's bankruptcy. A Chapter 7 bankruptcy can remain on your credit report for 10 years. A Chapter 13 will remain for seven years from the date of discharge. Keep in mind that the Chapter 13 bankruptcy may have been active for three to five years before the discharge while you were working the repayment plan, so it may stay on your credit report longer than seven years.
Disputing Inaccurate Items
The only legal way to remove negative items from your credit report is to file a dispute with the credit reporting agency. Write a letter to the agency stating which information is inaccurate and ask that they remove this information from your credit file. You should also provide copies of any supporting documents that show that this information is inaccurate, but it is the original creditor's obligation to verify the accuracy of the information. If they creditor can not verify the negative information, the item must be removed within 30 to 45 days.
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