Perhaps you have read a popular myth that negative information, such as payments or collections in the credit reports, drops out after 7 years. Is that true though? However, that is not always the case, and it is not as easy as it may seem. Here is insight on how long negative information persists on your credit report and how soon you can start rebuilding your credit.
The 7-Year Rule
Certain laws such as FCRA have specific periods that credit reporting agencies can keep negative information on your credit reports and in most cases it is 7 years. This includes:
- Late payments
- Collections accounts
- Charge-offs
- Bankruptcies
- Foreclosures
- Repossessions
- Tax liens
Therefore to answer your question, yes, those black marks will indeed fall off your credit reports after 7 years from the time you first paid your bills a day or week early or failed to pay at all. They can only report them for up to 10 years, and after that, credit bureaus cannot continue reporting them under federal law.
However, that doesn’t mean that it is great as soon as 7 years pass without any default.
1. It may also take some time before your credit reports will only show the more recent negatives. If you have made payments on other accounts more recently, that usually hangs around for up to 7 years from the delinquency dates on your reports.
2. Such accounts are closed but are left in the system for 10 years. Closed credit accounts that were prepaid or paid in full and closed without being delinquent can remain on the reports for up to 10 years from the account closure date. This can be both the beneficial and detrimental mode of communication that revolves around that account.
3. Life does not work in a way where your credit scores would immediately improve. It can be explained that scores represent the credit history you have provided for the past 710 years. While it’s encouraging that negative items can eventually fall off your credit report, don’t think that your score will immediately recover on its own. Scores are known to take a long time to regain, in the case of a sporting team for instance.
The Reality: This helps to understand that it takes time to rebuild credits.
While it is true that your credit file can only be reported for a maximum of 7 years from the time your credit became delinquent, do not expect your credit to be blemish-free as soon as 7 years have elapsed from the time your credit information went bad. This is especially so because creditors, lenders, and insurers might not be willing to lend to you again unless you prove that you are reliable by paying back loans and premiums on time.
Nevertheless, it may take several years to reconstruct the shredded credit history – it would take even more time if one’s previous credit record indicators included bankruptcy or foreclosure. The keys are to:
- To ensure that there is no disruption in the business relationship pay all open accounts on time from now on.
- another tip is to try and maintain low credit card balances.
- They should avoid making new credit applications
- Paid tradelines and specifically secured cards should be used to establish a healthy credit history
Remember, missed payments rarely disappear from your credit report and thus, the only way you can get your scores back on the right track is by maintaining steady and on time payments over several years while using credit responsibly. Overall, the majority of consumers bounce back to scores restored 700+ in 37 years after the occurrence of a negative event provided the credit is handled responsibly.
Hence, one should be patient and work on other aspects of financial behaviors. While you expect that negative items will drop from credit reports at some point, credit score repair and approval chances require some time. To be on the safe side, it is advisable to seek a piece of expert advice from a nonprofit credit counselor on the most appropriate way to go about the process of rebuilding credit.
Call now for expert credit repair services: (888) 8037889
Read More:
Can you repair credit without paying?
Who has the best debt relief program?
