As you may know, your credit report contains various information ranging from employment and housing history to credit card and mortgage account activity.
It may include both positive and negative information, such as as on-time payments and accounts paid as agreed, or conversely, late payments, collection accounts, charge-offs, bankruptcies, judgments, and tax liens.
Obviously the good stuff, is, well “good,” and nothing to fret about. But what about the bad stuff, how long will you have to pay for those past mistakes?
Well, the answer can vary depending on the type of account, and the associated activity on said account. Or the action that took place.
In the positive department, a general rule of thumb is that typical “paid as agreed” revolving and installment accounts stay on your credit report for 10 years from the date of last activity. And their presence can continue to help you until they fall off.
In the negative department, most bankruptcies will remain on your credit report for 10 years, though some for just seven years. Tax liens remain on your credit report for seven years from the date they were paid. Lawsuit or judgment information is typically reported for seven years, and credit inquiries stay on your credit report for two years (but only affect your score for the first 12 months).
Here’s a list of how long negative items stay on your credit report:
Bankruptcy Chapter 13: 7 years from the filing date
Bankruptcy Chapter 7, 11, or 12: 10 years from the filing date
Charge-off: 7 years from the date of original delinquency
Collection: 7 years from date of original delinquency
Credit Inquiries: 2 years (only count against you for 1 year)
Foreclosure: 7 years from filing date
Judgment: 7 years from date it was reported
Late payments: 7 years (credit score impact reduced after 2 years)
Paid Tax Lien: 7 years from date paid
Unpaid Tax Lien: 10+ years
Paid and Closed Revolving/Installment Accounts: 10 years from date of last activity
*This is general information. Rules may vary by the state in which you reside.
For the record, positive information may remain on your credit report indefinitely, unless the account is closed or inactive.
A Few Other Important Things to Note
A collection or charge-off that is paid will not extend the maximum period of reporting beyond seven years. But collection agencies may try to extend the date by keeping the account active if you make a recent payment, and essentially reset the 7-year period of reporting.
If this happens to you, simply write a letter to the credit bureaus and they should remove the collection or charge-off by the original 7-year mark, which is based on the original delinquency date. It is against the law for collection agencies to extend this time period, so make sure you know your rights (source: Experian)!
Also note that collection accounts and charge-offs will remain on your credit report for seven years whether they are paid or not. If you pay them, it will simply change the status to paid, but the account(s) will still remain on your credit report (how to read your credit report).
The only way you can legally remove collections and charge-offs any earlier is to write a dispute letter to the credit bureaus claiming the information is reporting in error. This is actually a highly effective and easy method to remove bad stuff from your credit report, so be sure to keep this strategy in mind.
It may also be helpful to get your hands on a tri-merge credit report that contains information from all three credit bureaus, as they can and will report different information at different times (why are credit scores different?).
Finally, note that negative items tend to hurt your credit scores the most in the first two years, and then slowly loss their “power” over time. In short, older delinquencies hurt you less than newer ones, all else being equal.