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If negative information on your credit report is dragging down your scores, you're likely looking forward to the day it goes away. Unfortunately, there is no one answer to when that day will come. In fact, how long something will remain on your credit reports depends on what it is.
Your credit report is made up of information that can generally be classified into two categories: positive and negative. Positive information includes properly managed loans, on-time credit card payments and, in certain cases, utility or rent payments. Negative information includes public records such as bankruptcy, third-party collection accounts and other evidence of financial mismanagement, including late payments and defaults.
|How Long Accounts Stay on Your Credit Report|
|Type of Account||Time Frame|
|Open accounts in good standing||Indefinitely|
|Closed accounts in good standing||10 years|
|Late or missed payments||7 years|
|Collection accounts||7 years|
|Chapter 7 bankruptcy||10 years|
|Chapter 13 bankruptcy||7 years|
|Credit inquiries||2 years|
How Long Does Positive Information Remain on Your Credit Reports?
The Fair Credit Reporting Act (FCRA) is the federal statute that defines consumer rights as they pertain to credit reports. Among other consumer protections, the FCRA defines how long certain information may legally remain on your credit reports.
There is no requirement in the FCRA for credit reporting agencies to remove positive information such as on-time credit payments—they can remain on your credit reports indefinitely. Even after a positive account has been closed or paid off, it will still remain on your credit reports for as long as 10 years.
The credit bureaus (Experian, TransUnion and Equifax) keep a record of your accounts in good standing even after they've been closed because it's important for credit scoring systems to see their proper management. As such, credit scoring systems such as FICO and VantageScore® still consider closed accounts that appear on your credit report when calculating your scores.
How Long Does Negative Information Remain on Your Credit Reports?
The length of time negative information is allowed to remain on your credit reports is largely defined by the FCRA. Unlike positive information, almost all negative information eventually must be removed from your credit reports. However, not all negative information has the same timeline for removal.
For example, late payments are allowed to remain on a credit report for as long as seven years from the date of their occurrence. This includes any notation that one or more of your accounts was 30, 60, 90, 120, 150 or 180-plus days past due. These are the only late payments that can appear on your credit reports.
Charge-offs, accounts in collections, repossessions, foreclosures and settlements all indicate that you've defaulted on an account. In every one of these scenarios, the credit reporting agencies are allowed to report them for no longer than seven years from the original delinquency date that led to their default.
Bankruptcies are another example of negative information that can appear on your credit reports. There are two main types of bankruptcies consumers can file: Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy, also called a straight bankruptcy, discharges all legally dischargeable debts. A discharge doesn't eliminate the debt, but it prevents creditors from attempting to collect it from the person who filed bankruptcy. Creditors are still able to collect the debt from other liable parties, such as a cosigner or guarantor. Chapter 7 bankruptcies can remain on credit reports for up to 10 years from the bankruptcy's filing date.
A Chapter 13 bankruptcy is also called a repayment plan or a wage earner's plan. People who do not qualify for a Chapter 7 bankruptcy, likely because they are still employed, may qualify for a Chapter 13 bankruptcy. With a Chapter 13 you will be required to make payments to a court-designated trustee, who will then distribute the funds to your creditors. After no longer than five years, any remaining debt is discharged. While Chapter 13 bankruptcies can legally remain on your credit reports for up to 10 years, Experian removes them seven years from the filing date.
How Long Do Inquiries Stay on a Credit Report?
Inquiries don't fall neatly into either the positive or negative information categories. Inquiries are either neutral or negative to your credit scores, but do not indicate mismanagement or the default of a credit obligation, and don't always result in a lower credit score.
Inquiries are simply a record of access into your credit reports by a third party, like a lender. Inquiries will remain on your credit reports for up to two years, and are considered either "soft" or "hard."
A soft inquiry results when you or someone else views your credit report for non-lending purposes, such as a credit card preapproval. Soft inquiries only appear on the version of your credit report you get when requesting your own report, and don't affect your credit scores. A hard inquiry will appear as a result of applying for credit or debt. Hard inquiries are visible to anyone who views your credit reports, and too many can lower your credit scores.
How to Remove Negative Information From Your Credit Report
As long as the information is accurate and verifiable, the credit reporting agencies will maintain it for the aforementioned timeframes. If, however, you have information on your report that you believe is incorrect, whether it's positive or negative, then you have the right to dispute the information and have it corrected or removed from your credit reports.
The most efficient way to file a dispute is to contact the credit reporting agencies directly. And while Equifax and TransUnion have their own processes for consumers to dispute their credit reports, Experian makes available three dispute methods: You can do it over the telephone, via U.S. mail or online.
Time Is On Your Side
While active and positive accounts will remain on your credit reports indefinitely, most negative information must be removed as a matter of law. The legally mandated removal of negative information is automatic and free, meaning you do not have to remind any of the credit reporting agencies to delete negative information once it has reached the end of its allowed timeframe. You also do not have to pay any person or company to cause the timely removal of negative information.
If you do not know what's on your credit reports, you can access free copies at AnnualCreditReport.com. If after your review you believe some information is incorrect or fraudulent, you can file a dispute online.