How Long Do Negative Items Remain on My Credit Report?

A positive credit report is a ticket to loans with low interest rates, according to Cari Noga of the Bankrate.com financial advice site. People who make a string of late payments or default on accounts start to lose the benefits, and those with big problems like bankruptcy face continual turn-downs. Fortunately, negative credit report items eventually go away.

Definition

Credit reports are summaries of a person's demographic information and financial activity, compiled by the Experian, TransUnion and Equifax credit bureaus. Positive information makes it easier for a person to open credit accounts, buy insurance policies and get jobs. Negative items may prevent these transactions. Common negatives include late or missed payments, as well as accounts that are charged off and sold to collection agencies, court judgments for unpaid bills, bankruptcies, foreclosures and repossessions of vehicles or other goods purchased on credit.

Time Frame

Positive information on open accounts stays on credit reports indefinitely, but Experian explains that negative items eventually disappear. Most items -- like delinquencies, collection accounts, legal judgments, liens, foreclosures and repossessions -- remain for seven years. Bankruptcies are reported for 10 years, while unpaid tax liens show up for 15 years or drop off after seven years if they are paid. Credit report requests are erased in two years.

Effects

Negative items have some effect for as long as they are visible to creditors. Quicken Loans warns that credit blemishes mark a person as a risky borrower. People with many negative items are turned down for accounts and loans or forced to pay higher interest rates if they are approved. They are often turned down for insurance policies, jobs and apartment rentals, and utility companies may require them to pay high deposits for service.

Prevention/Solution

Bad credit is preventable if a person has modest account balances and pays all bills on time. Once a credit report has blemishes, the FICO credit scoring company explains, the only way to fix it is to rebuild the payment history and use accounts responsibly. This helps a consumer overcome some of the negative effects until the old items are erased, because creditors pay the most attention to recent performance.

Warning

Negative items should automatically disappear from credit reports after the appropriate period. Sometimes they remain and continue hurting the person's credit rating. The Federal Trade Commission notes that everyone is entitled to one free credit report annually from each of the three credit bureaus through annualcreditreport.com. People who know they have items that should have dropped off their reports should order free copies and confirm the items are no longer reported They can dispute outdated items with the credit bureaus to ensure they are erased.