How Long Do Negative Items Stay on My Credit Report?

How Long Can Negative Items Stay on My Credit Report?

There are a few different timelines for negative entries on your credit report. Here are the main ones of concern:

• 2 years: Hard inquiries can stay on your report for two years.

• 7 years: Missed payments, late payments, repossessions, and foreclosures can remain on your credit report for seven years.

• 10 years: Bankruptcies, whether under Chapter 7 bankruptcy or Chapter 13 can remain on your credit history for 10 years from the filing date.*

*All three of the major credit bureaus — Equifax, Experian, and TransUnion — only report Chapter 13 bankruptcies for seven years. The credit bureaus can change this at their whim, but they've followed this rule for many years now.

What Law Regulates Credit Reporting Timelines?

The Fair Credit Reporting Act (FCRA) is the federal law regulating credit reports. The FCRA has several time limits for how long a derogatory mark can remain on your credit report.

The timeline is tied to the type of debt, not to the creditor or debt collector. This is helpful to know because creditors like credit card companies, student loan companies, mortgage companies, and other personal lenders often charge-off delinquent accounts to collection agencies.

How Long Can Liens and Judgments Stay on Your Credit Report?

Liens and judgments can have a significant impact on your credit report, and it’s important to understand how long they can remain there. Currently, the three major credit bureaus—Equifax, Experian, and TransUnion—do not report tax liens and civil judgments due to the strict requirements set by the National Consumer Assistance Plan. However, this practice could change at any time, so it’s crucial to be aware of the underlying laws.

The Fair Credit Reporting Act (FCRA) determines how long liens and judgments can stay on your credit report based on their statute of limitations. Unlike other negative items, such as missed payments or bankruptcies, the timeline for liens and judgments isn’t fixed.

For example, federal tax liens can stay on your credit report for up to 10 years. State tax liens, however, vary depending on the state. In California, for instance, state tax liens can remain on your credit report for up to 20 years. Civil judgments follow a similar pattern—they can stay on your credit report as long as they’re enforceable under state law. Some states allow judgments to be enforceable for 10 to 15 years, while in others, judgments can be renewed indefinitely, potentially keeping them on your credit report until they’re paid off.

It’s also important to note that the reporting limits set by the credit bureaus differ from the legal statutes of limitations. Understanding your state’s laws will help you know how long these items can impact your credit.

Are there "special credit reports" where all items can stay on the report forever? 

Yes, there are special circumstances where negative marks can remain on a credit report indefinitely. While most derogatory items eventually drop off your regular credit report, they don’t disappear entirely from the credit bureaus' systems. The Fair Credit Reporting Act (FCRA) allows credit bureaus to report these items in the following specific situations:

• A credit transaction that is for more than $150,000 or should be expected to be for more than $150,000

• The underwriting of life insurance involving, or which may reasonably be expected to involve, $150,000 or more

• The employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more

In practice, this means that if you apply for a mortgage, the lender might see missed payments that are older than seven years, though this usually won’t prevent you from getting the loan. In fact, most mortgage lenders expect some past-due payments among applicants, and competition among lenders means an old missed payment is unlikely to significantly impact your interest rate.

However, when it comes to job applications, the stakes might be higher. Some states, like California, Colorado, and Connecticut, have laws restricting employers from accessing your credit report. But even in states without such restrictions, most employers don’t pull credit reports unless the job involves handling cash or other financial responsibilities.

Can You Get an Item Off Your Credit Report Sooner?

Sometimes. It's possible to remove negative items from your credit report before they naturally fall off, especially if they’re inaccurate. Sometimes, lenders or debt collectors continue reporting negative items past the seven-year mark, either by mistake or to pressure you into paying. Removing these items can significantly improve your credit score. Here’s how you can do it:

Dispute Inaccurate Items

If you find inaccurate information on your credit report, it’s crucial to have it removed. Disputing errors not only cleans up your credit report but also boosts your credit score (also known as your FICO score). To dispute an item, you can file a complaint with the credit bureau by letter, online, or over the phone. However, it’s best to avoid phone and online disputes because they may not provide a solid paper trail, which is essential for tracking your dispute and ensuring your rights under the Fair Credit Reporting Act (FCRA) are protected.

For the best results, send a written dispute letter to the credit bureau and the debt collector. Use certified mail with a return receipt so you have proof of when they received your letter. The Consumer Financial Protection Bureau (CFPB) offers free sample dispute letters to help you get started. Make sure to include any documentation that supports your claim, such as bank statements or account records. Once the credit bureau receives your dispute, they have 30 days to investigate, or 45 days if you provide additional information during the process.

Where To Send Your Dispute

You only need to send your dispute to the credit bureau that is reporting the inaccurate information. Here are the mailing addresses for the three major credit bureaus:

• Experian P.O. Box 4500 Allen, TX 75013

• TransUnion Consumer Solutions P.O. Box 2000 Chester, PA 19016-2000

• Equifax Information Services, LLC P.O. Box 740256 Atlanta, GA 30374-0256

Requesting Removal of Accurate Items

If the negative item on your report is accurate, getting it removed is more challenging but not impossible. Credit bureaus usually won’t remove accurate information, but there are two strategies you can try:

1. Goodwill Letter: After paying off the debt, you can send a goodwill letter to the creditor, explaining the circumstances that led to the late payment or missed payment. You’re essentially asking for their mercy to remove the negative mark. If successful, this could improve your credit score.

2. Pay-for-Delete Settlement: You can negotiate with the debt collector to remove the item in exchange for payment by using a pay-for-delete letter. This isn’t always successful and often violates the contract between the collector and the credit bureaus, but some collectors might agree to it if they prioritize getting paid over following the rules. If it works, this can also boost your credit score.

Let’s Summarize…

Many people aren’t aware of the various time limits for items on their credit reports. While the credit bureaus sometimes choose to report certain items for shorter periods than the law allows, this practice isn’t guaranteed and can change. Currently, judgments and tax liens aren’t being reported, but it’s crucial to know the legal limits since the credit bureaus could start reporting them again.

You don’t have to wait for negative items to expire on their own. The law requires credit bureaus to remove errors, and some consumers have even convinced creditors to remove accurate negative marks. To maintain the best possible credit score, review your credit reports at least once a year and dispute any inaccuracies. Doing so can help you save money with lower interest rates tied to a better credit score.