Does Stuff Come Off Your Credit Report When It Is Paid Off?

Generally, the only way negative information comes off your credit report is when the statute of limitations ends. When you pay a debt, your credit report reflects the change, but the account information remains. Under some circumstances, creditors may change or replace information as part of an agreement. Time limits for accurate reporting vary depending on the severity of the situation.

Time Frame

Chapter 13 bankruptcies, late payments, defaults, foreclosures, public record judgments, collection actions and most other negative information remain on a credit report for seven years. Chapter 7 bankruptcies remain for 10 years, and unpaid tax liens may stay on your report indefinitely. Credit application inquiries remain for two years. Checking your own credit report or inquiries by current lenders do not affect your credit score, and only you will see these items. Positive paid and closed accounts may stay on your report for up to 10 years, and creditors may report information on open accounts as long as you continue to do business with them.

Considerations

The impact of negative information on your credit score lessens over time, says the Fair Isaac Corp., or FICO, which provides credit scoring. Your credit report and score demonstrate your ability to manage finances over your entire credit history, and paying a delinquent account may not improve your score immediately. As creditors base lending decisions on your entire report, old delinquencies damage your creditworthiness less than current information.

Errors and Requests

If you have a late payment, charge-off or other delinquent information, you can contact the lender and request that the information be removed or changed. Creditors do not have to remove or change accurate information, but it doesn't hurt to ask. By law, credit-reporting bureaus must remove errors from your report. Contact the applicable credit bureau to have inaccurate information corrected or removed. Clerical or obvious errors are generally resolved without incident, but disputes might require an investigation by the credit bureau.

Concerns

The Federal Trade Commission cautions consumers against credit repair companies that claim they can erase bad credit or instantly fix credit scores. These companies cannot remove accurate information, and they charge fees. Unlike reputable credit-counseling agencies that help with budgeting and teach consumers how to improve credit over time, scam agencies perform services, and charge fees, for things you can do yourself for free, such as correcting credit errors.