Having a bad credit score can be quite unsetting, as it often creates a situation where people cannot get better loans, have to pay very high interest rates, and find fewer employment opportunities. The good news, however, is that credit reporting agencies are mandated to delete the negative information about you after a certain time. However, credit repair is not a one-day business and it requires adequate time to be accomplished. According to the kind of negative mark involved, it is possible to take up to 10 years to erase the mark from the credit history.
Making Sense of the Phrase ‘Wiped Clean’ Concerning Your Credit Status
When we discuss ‘clean slate’, we mean the process of negating negative entries featured in your credit reports with the three credit reporting firms namely Experian, TransUnion, and Equifax. These are the areas of credit reporting that encompass all the adverse credit information such as late payments, collections accounts, bankruptcies, foreclosures, repossessions, tax liens, and judgments.
As per the FCRA, credit bureaus are bound by law to delete most negative information after a certain amount of time has elapsed unless there are other instances of non-payment of dues in between. In other words, the idea of the ‘clock’ starts ticking again and the existing negative marks are not cleared as long as new negative activity is added.
This expiration policy gives consumers a chance to try to reclaim credit as time progresses. Thus, when these negative items fall off your reports, your credit scores rebuild and you regain some ability to access cheap credit products.
How Long Does It Take For The Different Types Of Negative Marks To Be Removed from Your Credit Reports?
Here’s a quick reference guide to when major negative credit events expire:
• 7 Years of Paying Bills After Due Date
• Collection Accounts – seven years from the date in which the account first became overdue.
• Charge-Offs – 7 years starting from the date when the account was closed.
• Bankruptcies - 7-10 years depending on the chapter filed.
• Foreclosures – seven years from the date when the process is complete.
• Repossessions – 7 years from the date when such products were repossessed.
• Tax Liens – Usually 7 years but certain types might persist indefinitely.
• Civil Judgments- Generally 7 years or the state’s statute of limitations whichever is high is considered.
• Inquiries - 2 Years
Indeed, as already mentioned above, most of the negative credit information stays on your reports for roughly 7 years. If we look at the bankruptcy then, the time taken by Chapter 13 is 7 years and for Chapter 7 it is 10 years.
The only data type that could be reported indefinitely is the public record data such as tax liens and civil judgments because they involve collecting debts owed consumers. All of these can be legally reported to credit reporting agencies as long as the statute of limitations has not elapsed in that state.
For example, if the statute of limitations in your state is 6 years, a judgment can show for 6 years. Depending on the number of years set for the statute of limitations for the case, it could remain much longer if you have a 15-year statute of limitations.
Are Other Accounts Such As Closed Ones Also Part Of Your Credit?
Besides negative marks, you may be thinking about what happens to accounts that you have managed in the past and that were quite good. Some accounts are closed in positive standing, this includes credit cards that you do not use anymore, student loans that have been paid, and auto loans that were closed several years ago, these you will notice will remain in your credit report for the next 10 years from the time you closed the account.
Unlike in the previous section, these accounts may continue to appear although their delinquencies will not count against you once you pay off your balances. More so, it is often beneficial to have both some open credit accounts and those that have been closed recently which positively contributes to the length of credit history.
What if instead of using the last seven years of negative marks data my Glasgows is reporting old negative marks data?
Misdeeds do occur, and you might notice that old negatives are still haunting your credit when they should not be. If you find something dubious that seems stale, the Fair Credit Reporting Act allows you to challenge the information.
The best way is to write a letter or use an online dispute form with all the data that show the mark is reported beyond the legal timeframe to the bureaus of Experian, TransUnion, and Equifax. This leads to an inquiry where the agency has to check on the accuracy with the concerned organization that submitted the data within one month.
If the credit bureau is verifying the accuracy of the information provided, which is old, it has to delete the negative item from your credit report immediately. This enables you to make use of your consumer rights and bring your credit back on the right track than before.
Although credit repair is a gradual process, there are ways that you can take to hasten the process.
The following is how:
Getting frustrated just to wait for the negatives to disappear after almost 7-10 years feels sickening when one is in search of a funding source at present. Fortunately, there is a way to speed up the credit repair process, in particular, when you can initiate behaviors that would be evidence of creditworthiness. A few ways to help wipe your credit clean faster include:
• Settle All Accounts Early or on Time - Your payment history contributes approximately 35% to your credit score. In a bid to avoid the penalties of late payment, it is recommended to pay every dollar on time each month to establish a favorable credit history.
• Another factor: Keep Balances Low - High balances are detrimental to scores. Limit the usage of credit cards and other, high interest-bearing, revolving credit to not more than 30% of the credit limit.
• New Credit – All applications are requests for new credit, which cause scores to decline at least temporarily. Use it sparingly when it is necessary to apply for new accounts that the company cannot avoid registering with.
• Fix Reporting Errors – Be proactive in addressing these issues and take necessary actions to protect your consumer rights.
• Close Unnecessary Cards By Choice – Additional open revolving credit that is not required creates security issues but could also reduce the credit utilization mix ratio. Close these responsibly.
No step can delete the negative info at the initial stage before the limitation time ends, but positive actions are useful to make other score factors at least more robust in the meantime. Good financial habits also help to minimize future risks since it is very unhealthy to delink and go back to make more delinquent payments since it sets the clock all over again.
Closing Statement – Credit Scores Can be Improved
Rebuilding credit seems like an impossible task when the credit rating is already damaged but this guide shows that those stains do not stick around for long. Though waiting is crucial, assuming full and principal responsibility for mistakes and improving money choices in the future is more important. Watching carefully, one can recreate one’s financial situation with steadiness and punctuality.
If you need further assistance with credit issues or credit repair or you want to set financial goals, you can contact a credit nonprofit organization in your region. Many certified financial counselors can offer low or no-cost consultations and planning to formulate a unique financial strategy. Altogether, both of them as well as you can learn to free yourselves from the negative money patterns and start building new positive money habits one more step at a time.
Call now for expert credit repair services: (888) 803-7889
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