How Long Before That Debt Falls Off My Credit Report?

Reader Frank asks,

Is a true that after 7 years your bad credits go away?

By credit you mean debts, and, for the most part, the answer is yes. However, it depends. Some negative information can stay on your report for up to 15 years. Here’s a breakdown of how long each of 10 different kinds of negative items stay on your report, aka, drag down your credit score:

Delinquencies (30 – 180 days): Up to 7 years after the first missed payment, the original delinquency date, after which point you never caught up on your payments again. A 30 days late stops mattering after about a year or two, but 60+ days can last for a long time, notes commenter FDCPA Guy.

Bankruptcy: Ten years from date of discharge for chapter 7, 11, and 12. Seven years for chapter 13. Any accounts involved in the bankruptcy stay on for seven years.

Collection accounts: 7 years from the original delinquency date (ODD).

Charged-off accounts (when the original lender figures they’re never going to get money from you and writes it off as a loss and sells it to a collector): 7 years from the ODD, even if payments are late made (this is important to remember because some collectors try to say that by making a payment with them you’ve reset the debt clock. We covered this more in this post).

Closed accounts: 7 years from date of reported closing if they have delinquiencies, 10 years if there’s a positive balance.

Lost credit card: 2 years, if there’s no delinquienceies. If there are, then 7 years from ODD.

Child support judgments: 7 years from date judgement is filed.

Small claims and civil judgments: 7 years from date judgement is filed.

Liens: 15 years for unpaid tax liens. 7 years for paid liens.

Hard credit inquiries: 2 years.

Paid positive accounts: 10 years.

Positive open credit information: forever.

That many years sounds like a long time for a lot of these items. How will I ever get credit? Don’t worry so much, says commenter Stephmo. They note that a lot of credit-scoring models just look at the last 24 months, “meaning that if you keep your pills paid for 24 months and your score improves and you manage to rebuild credit for 24 solid months – this stuff starts to not matter as much. If you have 24 months of similar high re-established credit, most creditors will consider you “rehabilitated.” In many cases, you can even get auto-approved unless they’re really targeting specific delinquency types.”

[via Experian] (Photo: -heureux-)

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