Consumers make financial mistakes from time to time, some of which spill over onto their credit reports. Negative information on your credit report is not a life sentence, however. In fact, per the Fair Credit Reporting Act, all negative information on your credit report will be removed at specified times.
In a nutshell, the amount of time negative information will remain on your credit report depends on the type of negative information, and on how you addressed it in the first place.
Credit Reporting Time Limits: Common Pain Points
This post will detail the time it takes for consumers to break free from their negative credit history. A rule of thumb — the older the negative item, the less of an impact it will have on your credit score. A three-year-old debt, for example, will affect your score less than a three-month-old collection.
To break down the specifics, the following is a list of seven types of negative information one might find on their credit report, and how long it takes for consumers to wipe their slate clean in each category:
- Civil debts*, or debts the consumer owes through the court, may remain on the credit report for seven years from the filing date.
- Unpaid tax liens* may remain on the credit report for 10 years from the filing date, while paid tax liens could emain on the report for seven years from the payment date. (A tax lien, for consumers who are unfamiliar with the term, is imposed on a property to ensure the payment of taxes. It may be imposed in response to delinquent taxes, or in response to consumers failing to pay their income taxes.)
- Chapter 13 bankruptcy indicates that some of the consumer's debt is repaid, and may disappear from the credit report after seven years from the filing date. Chapter 7 bankruptcy, however, indicates that none of the debt is repaid; and therefore, it will could remain on the consumer's credit report for 10 years from the filing date.
- Closed accounts without negative payments may remain on your credit report for 10 years. (Note that positive accounts could stay on your credit report longer than negative accounts.)
- Late payments may remain on your credit report for seven years from the delinquency. Correspondingly, if a series of late payments are brought current, they may disappear from your credit report after seven years from the first missed payment.
- Collection accounts may remain on your credit report for seven years from the original delinquency date of the account.
- Inquiries may remain on your credit report for two years. That said, their impact on credit scores is minimal.
Are There Alternatives to Waiting for Negative Information to Disappear from My Credit Report?
While there's no surefire way to eliminate negative information from your credit report without simply waiting it out, you can certainly try. These three strategies are known to work under certain circumstances:
- Request a goodwill deletion.
Write a letter to the creditor, and explain why you were late. This is an effective strategy for consumers who typically make timely payments. Creditors are not obligated to approve goodwill deletion requests, but they will consider doing so for the right candidates.
- Submit a pay-for-delete offer to your creditor.
Contact your creditor, and ask them to consider removing the negative information from your credit report if you pay the full amount. Again, creditors are under no obligation to comply, but they will from time to time — especially if you're willing to shell out what you owe.
- File a dispute.
The Fair Credit Reporting Act states that consumers have the right to an accurate credit report. Consequently, should you identify any errors on your report, you may either file a dispute with the credit bureau, or with the business that reported your late payment to the credit bureau. Keep in mind, however, that disputes are meant to eliminate errors from your credit report, not to mask your negative credit history.
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