The Fair Credit Reporting Act is your best friend when it comes to cleaning up your credit report. It controls when creditors must remove negative accounts from your report. Most negative accounts drop off seven years after the first reported delinquency, while others stay on for up to 10 years. However, even if the debt falls of your credit report, some state laws allow debt collectors to sue for a judgment for a longer period of time.
Believe it or not, positive accounts, such as credit cards, stay on your credit report longer than negative ones. Open accounts with no negative history remain until you close them. After closing accounts, positive information stays on your credit report for 10 years.
Late payments drop off your credit report seven years from the original delinquency date -- the date when the account first goes late. In other words, if you miss a series of three payments and your account is 90 days late, but then you begin payments again and bring the account current, the delinquency date is the first missed payment. However, if you never get current and the account charges off, the original delinquency date is when it first went 30 days late.
It's trickier with collection accounts because you’re dealing with the original creditor and the collection agency. The key date is the date the original account first went late. Even if the account ends up with a creditor, the seven-year drop off period starts with the original account. However, if you get sued for the debt and a judgment results, the judgment is treated as a separate event and can stay on your report seven years after the judgment is filed, even if the original and collection references disappear.
There are two kinds of bankruptcies -- Chapter 7 and Chapter 13. You don't repay any debts with a Chapter 7, but with a Chapter 13, you pay back some of your creditors. Since a Chapter 13 bankruptcy requires you to repay debts, it drops off your credit report faster -- at seven years. The Chapter 7 remains for 10 years. The seven and 10-year periods start the day you file for bankruptcy.
Judgments and Tax Liens
Civil judgments, or court-enforced debts, stay on your report for seven years from the filing date, while unpaid tax liens remain for 10 years from the filing date. However, if you pay the tax lien, the file drops from your credit report in seven years.
Finding Original Delinquency Dates
Under the FCRA, you're entitled to a free credit report from the three credit bureaus -- Experian, Equifax and TransUnion -- once a year. As you review the reports, locate the accounts in question. Each account should list a "date of first delinquency." Use this date to determine when the reporting drop-off dates start and end. If you find any inaccuracies, file a formal dispute with the appropriate credit bureau. Each report should provide instructions or contact information for the dispute process.
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