Is My Credit Clean After Seven Years?

Credit reports and credit scores only help businesses make accurate lending decisions if those reports are up to date. The Fair Credit Reporting Act (FCRA), a collection of federal laws that governs the credit reporting industry, sets reporting periods for different types of information. A reporting period ensures that data remains on file only for the length of time that it is valid to lenders. Because of this, negative information cannot linger forever within your credit records.

Reporting Period

According to the FCRA, most derogatory information on your credit report remains for only seven years and 180 days. After this reporting period passes, the reporting agencies remove the derogatory information from your file, and it is no longer visible by you or current and future creditors. It also no longer impacts your credit score. Negative information that disappears after 7 1/2 years includes collection accounts, credit card charge-offs and late payments.

Clean Credit

If your credit record contains only negative entries and you do not incur new credit before the derogatory information is removed from your credit report, you could potentially be left with no credit history. Although you would still technically possess a credit report that contained your personal information, such as current and past addresses, your Social Security number, date of birth and any aliases, the report itself would not reflect any financial information. Having no credit makes you a high risk to lenders just as if you had poor credit, because lenders would have no positive payment histories and past proof of debt management skills to determine whether to lend you money.

Exceptions

While most negative information disappears after 7 1/2 years, some derogatory entries linger for much longer. Bankruptcies are a prime example. A Chapter 7 bankruptcy remains within your credit file for 10 years. Unpaid tax liens can linger within your report for 15 years, and judgments remain for however long your state permits creditors to legally enforce them.

Positive Information

Positive information on your credit report does not always disappear after seven years. Closed, positive accounts often remain a part of your credit report for up to 10 years before the reporting agencies remove them. Open and revolving accounts, such as credit cards, are reflected on your credit report for as long as you keep the account open and continue making purchases and payments. Thus, an open credit card account can potentially impact your credit score indefinitely.

Reporting Errors

Not all derogatory information required to be erased by the FCRA vanishes within the appropriate time frame. Reporting errors sometimes result in negative data remaining on your credit report -- and damaging your scores -- for longer than the federal government allows. Should you notice obsolete information within your credit file, you can contact the credit reporting agency whose file contains the error and dispute the data as obsolete. Consumers can dispute errors online, by phone or via mail.