Many things affect consumers’ credit reports. A high debt-to-income ratio, a late payment (or delinquency on payments) on credit cards and even too many inquiries on your credit score can result in fair credit or bad credit. Lenders continuously provide information to each of the three national reporting agencies about when and how you payoff your debts, be it fair or bad. With credit scores affecting everything from how you can borrow money to getting the best medical, home or auto insurance, it is important to keep your score positive. This article details different things that negatively impact credit scores and how long they do so.
People don’t always have the luxury of keeping a perfect credit score. Outside influences including the loss of a job, legal trouble or even just simple mistakes can cause missed credit card payments. Or even bigger influences – divorce or the closing of a company – can cause missed mortgage payments leading to foreclosure. How long does negative information affect credit reporting?
The Impact of Negative Credit Marks
Seven is the magic number when it comes to credit history. Negative items on your credit report can stay on file for a period of up to seven years. This includes accounts not paid as agreed upon or late payments. If these accounts involve revolving debt, such as a credit card, however, the marks can stay on your report for up to 10 years.
Collection accounts can also remain on your credit report for seven years, first starting from the date when your account first became past due and were reported to the collection agency. Judgments or tax liens can also remain this long. One stipulation is unpaid tax liens. These can remain on your file indefinitely.
Exceptions to the Rule
Bankruptcy has some different rules. Both chapter 7 bankruptcy and chapter 11 bankruptcy can fall off after 10 years, as can non-discharged or dismissed chapter 13. A discharged chapter 13 bankruptcy can still be omitted from your credit report after seven years. On a side note, anyone who has filed chapter 7 can be denied life insurance for the following year.
Student loans, or other loans backed by the government, also can remain on file more than others. Typical student loans can remain on your credit report for seven years, but another type of loan, a Perkins Loan, can remain for much longer. In a Perkins Loan, the interest in deferred while the student is still in school. These loans are backed by the school. They can remain a negative mark on your credit report until paid off completely.
When calculating seven years, it is important to know, the duration begins after any late or missed payments. The duration is not calculated from the last payment made. Consumers do not always realize this and may worry about making additional payments on accounts in collections. It is illegal for agencies to update their reporting status in order to influence the amount of time accounts remain on your reports.
Added Protection to Improve Your Score
Credit monitoring is one of the best credit decisions a consumer can make. Your score is not impacted if you personally check it, although it will remain as an inquiry on file for up to two years. Monitoring your scores with a free credit report should allow you to see what is negatively or positively impacting your score. You can check about open accounts such as an auto loan, personal loans and credit card debt. You can also dispute claims that you think aren’t accurate. Learn more about disputing claims via this link.
Do you have questions about credit repair? For advice, please visit experts at creditrepairkings. Check out various resources and get tips and legal advice from featured partners CreditRepair.com, Sky Blue Credit and Lexington Law. Learn about debt management with debt consolidation, managing your personal finances and get answers to another question you may have. Take a step today to improve your credit.