September 21, 2017
Shawn Lane
Consumer Credit Expert
Having bad credit hurts. It can make life miserable and stressful. It can harm you financially, it can damage your marriage, and it can stand in the way of providing the type of life for your family which you desire. Bad credit certainly is not any fun, but the good news is that bad credit does not have to be a permanent condition either.
Naturally, if you have errors or questionable information appearing on your credit reports you should exercise your right to dispute those accounts right away. (You can dispute them on your own, but you also have the right to hire a professional like FRS to work on your behalf.)
However, if an item is accurate or if your dispute is unsuccessful in removing an item with which you disagree, thankfully there is still most likely a time limit on how long the item may be allowed to tarnish your credit reports. Keep reading to learn more about some of the time restrictions which the Fair Credit Reporting Act (FCRA) and other laws place upon credit reporting.
7 Years or Less
When it comes to credit reporting time limits there are 3 primary categories. The first category of items must be removed from your credit reports in 7 years or less. Here are some of the accounts within the 7 year category.
- Collection Accounts – Must be removed 7 years (or less) from the date of default on the original account. (In all cases below, the date of default is defined as the date that the account became 6 months past due.)
- Foreclosures – Must be removed 7 years from the date of default.
- Late Payments – Must be removed 7 years from the date the late payment actually occurred.
- Charge Off – Must be removed 7 years from the date of default (which is normally 7.5 years from the date the account went 30 days past due).
- Defaulted (Paid) Student Loans – May remain on credit reports for up to 7 years from the date the debt was paid.
- Repossessions – Must be removed 7 years from the date of default on the auto loan.
- Judgments – Must be removed 7 years from the date filed
- (Paid) Tax Liens – Must be removed 7 years from the date of release.
*Note: The credit bureaus have recently opted to remove millions of tax liens and judgments from consumer credit reports. CLICK HERE to read “Why Millions of Tax Liens and Judgments Are Disappearing from Credit Reports.”
10 Years or Less
The second category of items has an FCRA credit reporting statute of limitations of 10 years or less. Bankruptcies make up the list of items which may remain on your credit reports for up to 10 years.
- Chapter 7 Bankruptcy – Must be removed 10 years from the filing date.
- Chapter 13 Bankruptcy – Must be removed 7 years from the date discharged. However, it often takes as long as 5 years for payments on a Chapter 13 to be completed and for the subsequent discharge to occur. As a result, the FCRA puts a 10 year maximum reporting cap on bankruptcies, beginning from the date filed.
No Time Restrictions
Under the FCRA there are a few items which are never required to be removed from your credit reports. Some items which are legally allowed to remain on a credit report for an unrestricted length of time include:
- Positive Accounts – No FCRA removal requirement exists. However, the credit bureaus generally delete closed, positive accounts after 10 years as a matter of policy.
- Unpaid Federal Student Loans – Defaulted student loans are not even addressed in the FCRA. Instead, they are governed by the Higher Education Act and no credit reporting statute of limitations for these accounts exists.
- Unpaid Tax Liens – There is no FCRA removal requirement for unpaid tax liens. However, as mentioned above, the credit bureaus have very recently opted to remove millions of tax liens from consumer credit reports.
Ready to begin renovating your credit and your lifestyle? Call 214-856-0068 or CLICK HERE to get started.
Please feel free to contact me if you have any questions.