Does Debt Fall off the Credit Report in Seven Years?

When you do not pay off a debt, for whatever reason, the original creditor may report the activity to various credit reporting agencies, such as Equifax, Experian and TransUnion. These negative items do come off your report after seven years from the date of the last activity on the account.

Fair Credit Reporting Act

The Federal Fair Credit Reporting Act dictates how information is reported and retained on your credit reports, helping ensure fairness and uniformity in the credit reporting process. Any debt that has been charged off or sent to collection must come off your credit reports once the debt has reached the age of seven years, according to the Act, which means that credit blunders of the past will not stay on your credit forever, affecting your ability to obtain a loan or to qualify for favorable interest rates on loans.

Last Activity

The age of a bad debt on your credit report, whether it was sent to collections or charged off by the original creditor, is determined by the date of the last activity on the credit account. Normally the date of the last activity on a debt is the date the item was either charged off or sent to collections by the creditor, according to financial expert Suze Orman. When you look on your credit reports, you see the date of the last activity listed for each item.

Paying off Debt

Even though you may satisfy an old debt by paying it off, the debt does not come off your credit report. Instead, the creditor may report the debt as satisfied, but the fact you once owed money to the creditor that you did not pay off in time still shows on your reports until the debt turns seven years old. If you decide to pay off your old debts, the action creates new activity on your credit accounts. Because of the new activity, the negative items will sit on your credit report for seven years from the date you paid them off, extending the amount of time they affect your ability to obtain credit.

Errors

Credit reports do not always contain accurate information, which is why checking your reports periodically helps you protect against errors hurting your credit worthiness unnecessarily. If you find a an old debt on your credit report that has exceeded its life of seven years, you must request that the credit reporting agency removes the item from your report. If the credit reporting agency determines that the last activity on the debt was over seven years ago, the item must come off your reports per the Fair Credit Reporting Act.