The primary way in which the creditworthiness of an individual is measured is through his credit score. This score, which is calculated using both positive and negative information contained in the individual's credit report, provides lenders an indication of the likelihood that he will pay back a loan on time. The record of a person's mortgage will stay on the credit report for its entire life, although some information will count only for a limited time.
Credit Reports
A credit report includes all information reported by lenders and acquired from public records that directly relate to an individual's credit history. This can include a record of any loans that the person has taken out, as well as whether she has paid back these loans on time. The exact terms of the loan will not be included on the record, but the date the loan was taken out will be noted, as will its size.
Mortgages
All home loans are listed on a credit report, starting when the loan is first reported to the credit reporting bureau by the lender who issued the loan. The record of the mortgage is never taken off the credit report -- it will remain on the report for the entire time that the report exists and the individual continues to take out credit. However, only some information about the mortgage will remain visible to creditors.
Positive Information
According to Experian, one of the three largest credit reporting bureaus, all positive information on a person's credit report can remain on the report indefinitely. So all information that boosts a person's score -- for example, records of loans that were paid on time -- will not be taken off a person's report. If a mortgage is taken out and paid off completely, with each payment made on time, this information will forever aid a person's credit score.
Negative Information
However, according to federal law, negative information can remain on a credit report for only a limited period of time, after which it must be removed and can no longer affect the person's score. If a person misses a payment on a mortgage, this record of the missed payment, which will pull down the person's score, must be struck after seven years, after which time it will no longer harm the credit rating.
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