When you pull your credit report, you will notice that it contains records of your current debts and accounts and debts you owed in the past. While some notations, such as credit cards that you pay on time each month, have a positive effect on your credit score, others, such as a bankruptcy, have a negative impact. Various factors influence how long a given notation, whether positive or negative, will remain a part of your credit history.
Account Type
The Fair Credit Reporting Act establishes reporting guidelines for each type of account that appears on your credit report. The majority of accounts, such as paid-off loans and collection accounts, remain on your credit file for no longer than seven years.
The FCRA establishes special reporting rules for bankruptcies, court judgments and tax liens. Bankruptcies remain a part of your credit history for up to 10 years while court judgments remain for seven years or until the statute of limitations for enforcing the judgment expires in your state, whichever time period is longer. Unpaid tax liens will appear on your credit record indefinitely. Once paid, however, the credit bureaus will remove your tax lien after seven years.
Open vs. Closed
An account's status as either open or closed influences how long it will appear on your credit report. For example, an open credit card account that you make purchases with and payments on each month will continue to update on your credit file indefinitely because the account is still active. Once you close the account, however, the seven-year reporting period kicks in.
Default Date
Defaulting on a debt influences its reporting period. After defaulting on either a loan or credit card account, your creditor will eventually take action against you and charge off the debt. Delinquent debts remain a part of your credit record for seven years and 180 days from the date you stopped making your payments.
If your debt was secured, your creditor may repossess your collateral, such as a home or car, in lieu of payment. Evidence of the repossession or foreclosure will remain in your credit history for seven years from the date the incident occurred.
Debt Validity
If, upon reviewing your credit history, you discover that a creditor mistakenly attributes a debt to you that you do not owe, you can dispute the account with the credit bureaus. The FCRA requires that all credit bureaus receiving disputes from consumers investigate an account's validity and, if the information provider does not verify that the data is accurate, the credit bureaus must remove the entry. Thus, disputing a debt that does not belong to you may shorten the amount of time that the notation appears within your credit history--even if the reporting period has yet to expire.
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