Any consumer who has had a late payment, collection account, or bankruptcy has probably wondered just how long that old indiscretion will stay on their credit report. If you’ve changed your ways and straightened out your finances it can be a bit painful to look back at those items. It’s certainly not fun to have them dragging down your credit score.
If you’ve ever wondered how long items stay on your credit report, here are the answers you need.
Who Makes the Rules?
There are two primary factors determining how long items stay on your credit report.
- The Fair Credit Reporting Act (FCRA) places limits on how long negative items can stay on your credit report.
- Credit reporting bureaus may have their own policies that govern how long items stay on your credit report.
Credit reporting bureaus cannot keep an item on your credit report beyond the limit set by the FCRA. They can and sometimes do choose to remove items earlier. The FCRA sets the longest time an item can remain on your credit report, not a minimum time.
How the 7-Year Rule Works
The seven year rule covers most negative entries on your credit report. But where do those seven years start?
Because credit involves a series of dates, there’s often confusion about exactly when the seven years begin and end. Consumers often wonder if the seven years begins on the date the account was opened, the day it was closed, or some date in between.
The seven-year rule begins on the date of the first delinquency after which the account is no longer made current.
If an account has been on your credit report for more than seven years, you can dispute it. Be sure that you are calculating the seven years from the right date.
If a collector is pressuring you to collect an old debt, remember that the seven years start from the date of the first delinquency, after which the account was no longer brought current, not from the date the debt was sold to the collection agency.
A Source of Confusion
Much of the confusion over the seven-year rule stems from a discrepancy between the FCRA definition of the seven years and the definition used by the three major credit reporting bureaus. The FCRA states:
“The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.”15 U.S. Code § 1681c
This suggests that the seven years start 180 days after the first delinquency.
In actual practice, Experian, Equifax, and TransUnion all count the seven years from the start of the delinquency. They can do this because the FCRA requirement is the maximum time an item can remain. Credit reporting bureaus are free to drop items from the record before that time as they see fit. They just have to make sure they don’t keep them on record beyond that time.
Not All Derogatory Information Disappears After 7 Years
Most negative credit information will disappear from your credit report after seven years.
There is one notable exception: Chapter 7 bankruptcy. That entry will remain on your credit report for up to 10 years.
Chapter 7 is a complete form of bankruptcy. It discharges all dischargeable debts that exist as of the date the bankruptcy is filed. The clock starts ticking on a Chapter 7 bankruptcy from the date the bankruptcy is filed with the court, and not the date the bankruptcy is discharged.
👉 If you filed for Chapter 7 bankruptcy in May, 2015, it will remain on your credit report until May, 2025.
The Impact of a Negative Entry Changes With Time
Negative entries will remain on your credit report for seven years, or ten for a Chapter 7 bankruptcy. They will not have the same impact on your credit score for that entire time.
Credit scoring models give more weight to recent information. That is true of both positive and negative records.
- If you have a long positive history but several recent missed payments, those missed payments will weigh heavily upon your score. The opposite is also true.
- If you have a few old negative records but a good recent history, the impact of those negative records will decline long before they actually drop off your report.
👉 For example: A 60-day late payment that occurred five years ago will have less impact on your credit score than a 30-day late payment that happened within the past year.
In that way, negative information “ages out” of your credit report. The account will remain on your credit report for seven years. The impact it has on your credit score will gradually decline.
Severity is also a factor. Negative credit information has something of a hierarchy.
👉 For example: A bankruptcy carries more weight than a minor collection account. A mortgage payment that’s 90 days late will have a bigger impact than a credit card payment that’s 30 days late.
The 7-Year Rule Doesn’t Mean Freedom After 7 Years
The 7-year rule on debts applies only to credit reporting, not to your actual obligation. An account that drops off your credit report will no longer affect your credit score. You still owe the debt. You can still be sued over the debt.
Each state has a statute of limitations that applies to debt. Once the statute of limitations expires, you still technically owe the debt, but the creditor can no longer sue you. You should know the difference between the seven year rule and your state’s statute of limitations.
Different Debts, Different Statutes
Different states have different statutes of limitations for different types of debt. The statute of limitations sets different time periods based on whether the debt is a written contract, an oral contract, a promissory note (installment debt), or an open-ended account (including credit cards).
The typical statute of limitations on credit card debt runs between three and six years after the account becomes delinquent. It can be as long as 10 years (in Rhode Island).
⚠️ In some states, making a payment or acknowledging that you owe a debt can restart the statute of limitations.
The statute of limitations is generally longer with installment debt. It typically runs from a low of three years to a high of 10 years. Some states extend the limitation beyond 10 years, including Vermont and Maryland. In Maine, it’s 20 years.
Even if the debt has dropped from your credit report, the creditor can still take you to court until the statute of limitations runs out.
When the statute of limitations expires, a debt is time-barred. The creditor no longer has the legal right to pursue a judgment against you.
Judgments & Tax Liens: Exceptions to the Rule
According to Experian, judgments and tax liens no longer appear on credit reports. Does that mean you’re in the clear if you have one?
Only as far as your credit report. A potential creditor won’t find out about your tax lien from your credit report, but credit reports are not the only ways that creditors investigate potential borrowers.
Even if a judgment or tax lien doesn’t appear on your credit report, it’s still a matter of public record. A creditor or other party investigating your creditworthiness will have access to either obligation through a public records search. Many creditors perform public records searches as part of their evaluation process.
That makes a strong case for paying off judgments and tax liens as soon as possible. Either may remain a matter of public record indefinitely, but a paid judgment or tax lien is much better than an open one.
Most personal bankruptcies fall into two types, Chapter 13 and Chapter 7. As explained earlier, a Chapter 7 bankruptcy will remain on your credit report for up to 10 years after the filing date.
Chapter 13 is a less extreme form of bankruptcy, and it typically remains on your credit report for up to seven years from the filing date. This will be true even if your repayment plan lasts for five years.
Late payments remain on your credit report for seven years after the date the account first became delinquent and was not subsequently brought up to date. That will be true whether the account remains open or has been closed.
If the consumer brings the account up-to-date it will become a positive credit factor once seven years have passed since the delinquency. At that point, it can even be reported as “never late”.
A hard inquiry will remain on your credit report for up to two years. A hard inquiry occurs when someone requests a copy of your credit report as part of an application for credit.
Soft credit inquiries, where the creditor accesses your credit score without pulling your credit, appear on your credit report but do not affect your credit score.
Collection accounts can be particularly difficult to assess because they may involve multiple creditors. When the original creditor turns your account over to a collection agency, it becomes a collection account. That first collection agency may sell your debt to another. The debt may be sold multiple times.
As complicated as that sounds, it’s all a single collection account. No matter how many iterations it has, it will be removed from your credit report seven years from the date it was first reported as delinquent by the original creditor.
The situation with charge-offs is similar to that of collection accounts. The account will fall off your credit report seven years after it first became delinquent.
Consumers sometimes believe an account will be removed from their credit reports sooner if they close the account. This is not the case.
Even if you close an account with negative credit information, it will continue to appear in your credit report for seven years from the date the delinquency or deficiency first occurred. Paid accounts generally have a less negative impact on your credit than unpaid ones, and some newer scoring models may not consider them at all.
The Bottom Line
Debt is not forever. Seven years – or ten years in the case of a Chapter 7 bankruptcy – may seem like a long time, but when that time is over, that black mark will disappear from your credit record. Even before then, its impact will start to diminish.
If you have negative entries on your credit report, you will just have to wait out the time it takes for them to drop off. There is no way to remove a legitimate entry from your credit report, and anyone who says they can do it is probably running a debt relief or credit repair scam.
Your best bet is to work on establishing new positive entries. Those new entries will have more impact on your credit score than the old negative ones, and they will help you improve your credit even before the old entries drop off.