Thanks to the Fair Credit Reporting Act (FCRA), most negative credit information has an expiration date. This means that the credit bureaus can’t report negative items forever. Still, there is a lot of misinformation and many myths circulating around the internet about just how long these items are allowed to show up on your reports.
Different items may be allowed to remain on your credit reports for 7 years, while others can remain for 10 years, and a few can actually remain forever.
And, under 3 unique scenarios the 7-10 rule doesn’t even apply. Additionally, positive credit report items may not hang around on your credit reports permanently either. As you’ve not doubt already figured out, there are a lot of moving parts. Here is a look at the amount of time certain items can remain on your credit reports, legally.
Negative Items on Credit Reports
- Collection Accounts – Required to be removed 7 years from the date of default on the original account. The “date of default” is the date that the original account became 180 days or approximately 6 months past due. The date the original account was assigned to the collection agency is NOT the date when the 7 year clock starts ticking. And, nothing you do with respect to the collection can reset the 7 year credit reporting clock…nothing.
- Foreclosures and Repossessions – Required to be removed after 7 years from the date of the original terminal delinquency. “Terminal Delinquency” means that the account has been unpaid for 180 days, which leads to the foreclosure or repossession. In other words, if you went 30 days delinquent in January of 2010 and into default in June of 2010 without bringing the account current in between, then the item can be legally reported until June of 2017.
- Charge Offs – Required to be removed 7 years from the date of original terminal delinquency.
- Settlements – Required to be removed 7 years from the date of original terminal delinquency.
- Late Payments – Required to be removed 7 years from the date the late payment occurred. The account does not have to be removed if it did not go into default, just the late payments associated with the account.
- Judgments – Required to be removed 7 years from the date the judgment was filed, whether it has been satisfied or not.
- Bankruptcies – Chapter 7 bankruptcies must be removed no later than 10 years from the date filed. Chapter 13 bankruptcies can remain on your credit reports for 7 years from the date of discharge, though this date may not exceed 10 years from the date filed. For a Chapter 13 the date of discharge and the filing date are not the same dates.
- Tax Liens – Paid and released tax liens are required to be removed from your credit reports 7 years from the date released. Withdrawn tax liens will be removed from your credit reports immediately (though this is a matter of credit bureau policy and not a requirement under the FCRA). Unpaid tax liens are never required to be removed from your credit reports, although the credit bureaus may choose to eventually remove them.
- Federal Student Loans – The FCRA is silent on the issue of defaulted federal student loans. Instead, the credit reporting limitations for these items are governed by the Higher Education Act. Once a defaulted student loan has been paid it is required to be removed from your credit reports after 7 years. However, unpaid federal student loans can remain upon your credit reports forever, although the credit bureaus may choose to eventually remove them.
Positive Credit Report Items
The FCRA is silent on the issue of positive accounts. There are no guidelines imposed on the credit reporting agencies which require them to remove positive information from a credit report, ever. Unfortunately for consumers, however, positive credit report information may not stick around permanently. Inactive positive accounts are removed from credit reports after a period of 10 years as a matter of policy.
The Exception to The Rules
The credit bureaus are allowed to never remove any negative information from your credit reports if the credit report being pulled is for one of the following reasons.
- Being used for employment screening of a job expected to pay $75,000 or more.
- Being used for a life insurance policy with a value of $150,000, or more.
- Being used as part of loan underwriting for an amount of $150,000, or more.
The credit bureaus choose to not maintain negative items longer than normally allowed even under these last 3 scenarios, but they are allowed to according to the FCRA.