A lot of people get confused about the length of time that negative information can appear on their credit histories. Most negative items, including late payments and charge-offs, drop off your report after seven or seven and a half years. But some information, including bankruptcies, can haunt you for ten years or more, and if you apply for a large loan or a high-paying job, credit bureaus don't have to leave anything off your report.
Credit Reports
Your credit report tells the story of your relationship with creditors. It contains details of each of your credit accounts, including loans, mortgages and credit cards, as well as records of court judgments against you. Each listing on your credit report tells potential creditors when you opened an account, the size of your credit line, your balance and your repayment history.
Reporting Time Frames
While records of good financial behavior, such as making minimum payments on-time, can stay on your credit report forever, there is a limit on how long negative information stays on most credit and consumer reports. Derogatory information, such as late payments, can stay on your report for up to seven years, while creditors and collection agencies can report charged-off accounts for seven years plus 180 days after the account first became, and remained, delinquent. Public records are a different matter. Credit bureaus can report bankruptcies for up to 10 years, though some choose to report Chapter 13 repayment plans for only seven. Paid judgments stay on your report for seven years, and your credit report shows tax liens until you pay them off. Once you do, they stick around for another seven years. Unpaid judgments can stay on your report until the statute of limitations on collecting judgment debt runs out in your state.
Exceptions
If a creditor or employer informs the credit bureau that you are applying for a job with a salary of over $75,000 per year or for a loan over $150,000, the restrictions on the length of time information can appear on your credit report no longer apply. Credit bureaus can retain old information and include it on credit reports issued to these employers and lenders, according to Dana Neal in his book "Best Credit: How to Win the Credit Game." While the credit bureaus are not required to keep this information, many do. If you take out a large loan or apply for a high-salary job, be prepared to explain whatever old and potentially negative information your credit history contains.
Deleting Negative Information
You have the right to dispute any inaccurate or old negative information that appears on your credit report. Under the federal Fair Credit Reporting Act, you can write to the issuing credit bureau and ask them to investigate the information. If they can't verify it, they must remove it. If the negative information on your report is accurate, you can wait for it to drop off your report, or you can ask the creditor to remove it. Some creditors will do this if you have a good relationship with them. If you owe money on a charged-off account, you can sometimes negotiate the deletion of the account from your credit report in exchange for paying what you owe.
Warning
There are companies that specialize in buying old debts for a fraction of their value and then trying to get debtors such as yourself to pay up. While it is illegal for them to do so, some of these companies report these old accounts to credit bureaus as "new" collections accounts. If this happens, contact the credit bureaus and request a deletion. You should also report the company that bought your debt to your state attorney general and the Federal Trade Commission.
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