Negative Items Fall Off Credit Report After Seven Year Itch, As Long As You Don't Scratch 'Em Creditors Don't Fraudulently "Reage" Them

Under the Fair Credit Reporting Act (FCRA), bad items fall off your credit report after seven years, but did you know that if you contact the creditor in any way during that time you they can use that to illegally reset the clock?

An entry on each item called the Date of Last Activity or Date of Last Contact, sometimes simply “DOLA,” is the start date for the countdown.

Your DOLA could be at 6 years, 11 months and 29 days, but if you contact the creditor, or make a payment on the balance, it goes back to zero, a process the credit industry calls, “reaging.”

UPDATE: If the clock gets “reset” like this is, the FTC says it’s wrong, and you should petition the credit reporting agencies to remove the item.

Make Your Nut says:

You will occasionally see an item reach the seven year limit and remain on your credit report.

It is your responsibility to contact Equifax, Experian, and TransUnion and inform them that an item does not belong on your credit report because it has aged beyond seven years from the DOLA.

— BEN POPKEN

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  1. dbeahn says:

    So if I have an account that’s 6 years and 6 months old and I have owed $3000 on it for that time, I’m better off to NOT pay it and just let it drop off?

    How insane is that – you’ll be “rewarded” for settling an old debt by having it stuck back on your report as a negative item if you do the right thing and pay the account off.

    I’m only bitter about it because it happened to me when I went back to pay off an old debt I ran up when I was young and dumb in college.

  2. dimestorereject says:

    What do you do when the reporting company automatically “reages” the item? I have a couple of items on my report that (while I readily admit are my own and that I am responsible for) were “due” to fall off this year. However, the reporting agency keeps updating the date to the current month.

  3. gorckat says:

    In Maryland, the statute of limitations is something like 2 or 3 years (I forget which, but I know if I hadn’t acknowledged a debt, it would have been outside that range in less than 6 months). Would that only cover the ability of a creditor to sue or does that also cover reporting to a credit bureau?

  4. number9ine says:

    My understanding is that this is inaccurate. The statutory limit for a negative tradeline is seven years and 180 days following the date of original delinquency on the account that led to the collection, charge-off or similar action.

    From § 605(c)(1) of the FCRA:

    In general. The 7-year period referred to in paragraphs (4) and (6) 3 of subsection
    (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

    IANAL, but what you refer to as the DOLA does not represent the date of delinquency on the tradeline. However, I agree with your

  5. cindel says:

    Only if you pay off the balance will you restart the clock. If you’re that eager for a positive tradeline or a deletion; get it in BLOOD. Seriously..

    Go here > http://www.creditboards.com

  6. number9ine says:

    commenter’s post that properly aged negative tradelines seldom drop off your credit report “like magic.” Initiating a dispute is often the only way to get them removed. The CRAs rely on the account holders to update tradelines, and most charged-off or collection accounts are given little attention paid beyond the statute of limitations for collection.

  7. crayonshinobi says:

    Jesus…so I have to wait 7 years for the phonecalls to my cell for “Pedro Hernandez” to stop?

  8. anexkahn says:

    this is not true… There are quite a few FTC Staff opinion letters which support that items are no longer reportable by the CRA after 7 years plus 180 days from the initial delinquency.

  9. SOhp101 says:

    If you’re going to pay off a delinquent account, MAKE SURE YOU GET IT IN WRITING that they will remove the derogatory mark on your credit report as part of the agreement to pay.

    Too many people make the assumption that paying it off will make the credit look brand new again but guess what? It’s stuck on your credit report until it falls off. Afterwards, if the company neglects to take off the negative info, dispute it with the credit agency and you should be okay.

  10. ARPRINCE says:

    I got this from the FTC website.

    (4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.2

    2 The reporting periods have been lengthened for certain adverse information pertaining to U.S. Government insured or guaranteed student loans, or pertaining to national direct student loans. See sections 430A(f) and 463(c)(3) of the Higher Education Act of 1965, 20 U.S.C. 1080a(f) and 20 U.S.C. 1087cc(c)(3), respectively.

  11. thrillhouse says:

    @dbeahn:

    If its had no activity, then yes, past the 7 year watershed, you could dispute and say it needs to be removed. But age for the debt and the last activity are two different things.

    Anyways, if you have to, a debt that old, you should be able to settle for much less – i writing of course, as others have stated.

  12. revmatty says:

    Getting it in writing is no guarantee either. Back in the early 90′s I created a lot of money problems for myself and trashed my credit. When I started cleaning it all up I had a lot of trouble with the reporting agencies removing things, even when the creditor was on my side and doing most of the work.

    I had months of back and forth letters and conference calls just on a BofA account, where the BofA rep was escalating through Equifax trying to get them to agree to remove the derogatory and Equifax kept saying “Tough. Once it’s on there we won’t take it off unless we want to.” Eventually Equifax rested on “If you can’t get a court order demanding we change it then we’re done.”

  13. number9ine says:

    @ARPRINCE:

    This section pertains to certain judgments, such as tax liens or bankruptcies that may have a longer statute, such as 10 years.

  14. macinjosh says:

    @crayonshinobi:
    This is Pedro Hernandez. Are there any messages for me?


    *slapping knee*

  15. Michael Bauser says:

    @dbeahn: If the debt is really “6 years and 6 months old”, it’s likely past the statute of limitations anyway. For most unsecured debts (like credit cards), the statute of limitations is six years (or less).

    The “7 years + 180 days” is the longest such a debt is supposed to stay on a credit report. (Sometimes, you’ll get lucky, and it will drop off earlier. I’ve heard that Transunion is good (bad?) for delisting past-limit debts a little early.)

    You won’t necessarily get away completely unharmed by outliving the statue of limitations on a debt free. If the creditor reports the loan as a cancellation of debt (using IRS form 1099-C), you have to declare the unpaid balance as income in the year the debt is forgiven. That’s in addition to the six+ years of bad credit and debt collectors.

    Which leads us to one of the dirtier little secrets of the debt collection business: There are some debt collectors who know they’re trying to collect debts past the statute of limitations, knowing they may be able to scare people into paying. But that’s proabably a subject for different day.

  16. With the number of posts trying to figure out what falls of the credit report when…

    I would like to ask consumerist to do a follow up post that gives some examples of common types of debts and how they get removed (via time?) from reports…

  17. impudence says:

    I am an attorney with some experience in credit matters. The information in this article is incorrect. Contacting the holder of the debt means nothing. If you start making payments on the debt again then the 7 year clock will reset. But you can speak to the debt holder all you want with no adverse effect as long as you are not making a payment or agreeing to make payments.

  18. Wrenae says:

    Let’s be clear here: how long items stay on your credit report and the “statute of limitations” are two different things. The statute of limitations (which varies by state and type of debt) says that a creditor cannot successfully sue you for debts after they have been delinquent for a certain period of time.

    Actually, they CAN sue, but as long as you show up for court and show that the debt is X years old and past the statute of limitations for that type of debt in your state, you will win the case.

    Your credit report is an entirely different matter. Negative items are supposed to be removed from your report after 7 (or 10) years as long as there has been no “new activity” on the account. I’m not sure what constitutes “new activity” (lawyers? experts? help with that, please?), but I would be careful not to instigate any new payment plans, etc, unless I was sure of the effect on my credit report.

    In short, the “statute of limitations” has nothing to do with your credit report.

  19. mac-phisto says:

    @dbeahn: you did the right thing & you can rest easy knowing that. but you probably also helped yourself. creditors are aware of the statute of limitations & will make use of it. case in point: i terminated an agreement w/ at&t wireless & refused to pay them another dime (including their ETF). i was anxiously awaiting the day that their entry would fall off my account. 5 years after i cancelled that account, they sold it to a collection agent, reactivating the debt as “new debt”. while that agent technically only had a short period of time to collect, i wasn’t about to let a 2nd entry sit on my report for another 7 years, so i caved.

    at&t, you sonuvabitches! *shakes fist in air*

  20. MakeYourNut says:

    @impudence: As an attorney, I am positive you have heard the industry saying “if the law is against you, argue the facts – if the facts are against you, argue the law”. (If both are against you, settle)

    How hard would it be for an unscrupulous debt collector to allege that the debtor expressed a willingness to pay the debt, and then go on to re-age the debt? How many debtors would have the time and resources to initiate a legal proceeding to prove that the collection agency lied through its teeth?

    Yes, what you say is correct – the FCRA dictates that either the debtor makes a payment or expresses a willingness to do so (along with other terms relating to the age of the account, etc.). But *in practice* it is all too easy for a savvy collections agent to talk circles around a stressed out debtor and get them to “kinda, sorta” agree to a plan. Boom, there goes the reage.

    A debtor with a sizable past due balance is probably not going to be able to come up with the $350 an hour to retain an attorney to fight this – even if it would be a clear summary judgment ruling. The collection agency has deeper pockets.

  21. star_ says:

    This is a common myth and incorrect. I am really surprised how much bad advice regarding credit exists on the net.

  22. snowpuff says:

    This article is mostly inaccurate and very misleading. Consumerist has a problem with sometimes posting items like this that are complete crap – and then they don’t correct them or follow-up even if you email them.

  23. Mr. Gunn says:

    I came in here to say that DOLA only has to do with payments, not communication. I see that job has been done for me, so I’ll say that re-aging debt is illegal, but collection agencies do it anyways hoping you the consumer don’t know that. As this article and many of the comments show, people mostly don’t.

    Debt collectors are like towing companies. They’re officially sanctioned bottom-feeders that prey on the screw-ups of the people that don’t have the resources to fight them. They collect on/tow enough innocent but ignorant people that they make up for the people who do successfully fight them.

    Personally, I’d rather we just had a civil penalty assessed by the courts and be done with it.

  24. DuckFOO says:

    I used to have a lot of bad debt, and some of it was five years old when I started paying it off. Paying it off ended up keeping things on my credit longer than it would have had I just not paid it off and let it go.

    The credit system, as constructed, doesn’t seem to reward people who go back and try to do the right thing.

  25. Ben Popken says:

    Ok, we’ve emailed the 3 different credit bureaus to get an official story on the things mentioned in this post, so we’ll see what they have to say.

  26. hobnob says:

    snowpuff pointed out that the Consumerist “has a problem with sometimes posting items like this that are complete crap.” This may or may not be true but I find it kind of irrelevant.

    I don’t know EVERYTHING, snowpuff doesn’t know EVERYTHING, you the reader don’t know EVERYTHING, nor do the Editors of the Consumerist know EVERYTHING.

    The whole point of a comment system is to discuss TFA. The truth comes out in the comments. For me, I find the comments in most cases across all of the Gawker blogs to be more informative than TFAs themselves.

  27. Noah_Bodie says:

    Paying off a delinquent debt will NOT reset the 7 year clock. Period. That said, in most states payment, even partial payment, DOES reset the SOL (Statute Of Limitations).

    SOL and the 7 year clock are completely separate things. SOL is in state law, or caselaw, and the 7 year clock is in the FCRA.

    Things do get quite a bit more complicated when we start talking about inquiries, bankruptcies, judgments, tax liens, etc. They have very different clocks.

  28. noogles04 says:

    Five years ago I voluntarily gave my car back. The original company put this on my credit then sold the car; thus, leaving a balance of $3791.00. They have since sold/transfered the debt and that company has put this debt on my credit plus any interest accrued as of 2007. I now receive a letter from an attorney (3 months before the statute of limitations) regarding this debt.

    I want to respond to this attorney and offer to pay the principle balance, but fear this will not be accepted. If a judgment is filed, will this be on my credit for an additional 7 years.

    This debt has been on for 5 years already, a judgment for the same debt would have this on my credit for 12 years total. How does this work and what can I do?

  29. paynewhitney says:

    Is the start date for the DOLA, the date of the 1st delinquent entry on your credit report? When I say delinquent I mean 30 days past due; 60 days past due or 90 days past due ?

  30. Anonymous says:

    I have a creditcard from college.I have not used it since 2/2002.It was reported on my credit on 9/2005. The credit card company has been calling my parents home for the last 2 months. Now they have sent a payoff amount that they will accept for my debt. Is this suppose to be off my credit at this point 5/2009. Any suggestions?

  31. keelytm says:

    If it’s illegal and wrong, how come they keep doing it as part of their policy? Are there not consequences for them beyond the slap of a hand? If that’s the case, the punishment should be amped up. I mean, someone’s credit score is a big deal. A lot financially depends on it. Or is it because they just don’t get caught very often? Either way, it’s still wrong and I think something should be done. A law is a law and that is that a creditor has to remove negative credit report items after 7 years.