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How Long Does
Negative Information Stay on Your Credit Report
In most cases, bankruptcy will remain on a
credit report for 10 years following the discharge of the bankruptcy. Other
entries remain for about 7 years from the date of the last activity. This means
that, generally, the 7-year clock is reset whenever you generate any activity on
a non-delinquent account, including making a payment. But once the account has
gone and remained delinquent, the clock cannot be reset. Some unscrupulous
creditors will try to reset the clock by reselling the account, but this is not
correct. The FTC has made their position clear on this.
The date of delinquency is
measured from the date of the last regularly scheduled payment before the
account became delinquent. For example, if your car payment is regularly due on
the 15th of each month, and you made your last regularly scheduled payment on
June 15, 2001, the delinquency may be reported on your credit report until July
15, 2008. In this example, the account did not become delinquent until you
missed that July 15, 2001 payment, therefore, it may only be reported for seven
years after the date of that missed payment.
Current law generally prohibits consumer
reporting agencies from including in a consumer report accounts placed for
collection or charged to profit and loss which predate the report by more than 7
years. The law now specifies that the seven-year period with respect to
information concerning a delinquent account charged to profit and loss may begin
no more than 180 days after the commencement of the delinquency.
Congress intended to establish a single date
-- the start of the delinquency -- to begin the obsolescence period (7 years
plus 180 days). This avoids the "multiple date" problem that arguably existed
prior to the 1996 amendments to the law. Thus, the date of the "commencement of
the delinquency" that led to the creditor's charge off or collection action
would be the earliest date from which the account was continuously delinquent,
plus 180 days.
The start of the 7 year period is now
described with some precision by the statute, and subsequent events, including
sale of the charged off account by the creditor, or a payment, or a dispute
about the account by the consumer, do not change the allowable reporting period.
There is an exception for charge offs or
collections that were first reported before December 29, 1997. Adverse
information such as collections or charge offs reported before December 29,
1997, are not subject to the new "commencement of the delinquency" provision,
and can be reported for 7 years from the date the creditor actually charged it
off.
