How Long Do Trade Lines Stay on My Credit?

Trade lines are the most common item on a credit report and the most important, because they can stay forever. A few mishaps, such as a late payment or two, will disappear from your record even when the trade line remains on your report. Since a negative trade line can stay for years, it is better to prevent defaults that dealing with the damage.

Identification

A trade line, often spelled "tradeline" in the credit industry, is any creditable account, such as a credit card or auto loan. Trade lines stay on your credit report for as long as the account is active. Although the credit bureaus can report closed, positive accounts for as long as they wish, the bureaus choose to omit close positive accounts 10 years after the last payment.

Negative Trade Lines

Accounts become negative when the consumer misses a payment or settles on the bill and the lender reports it to the credit bureaus. All negative trade lines appear on a credit report for seven years. If the account is closed, the trade line is a potentially negative account for seven years.

Misconception

Some trade lines are always negative and result from refusing to pay a bill, such as a collection account or charge-off account -- where the collector declares the debt noncollectable. The same seven-year reporting rule applies to these accounts. The clock can never "restart" on any account, even if you reaffirm it, such as making a payment on the debt or admitting you still owe the debt after the federal reporting period ends, according to John Ulzheimer of Smart Credit.

Tip

You need as many positive trade lines on your credit report as possible. Creditors want to see that you can handle several accounts at once, preferably a mix of installment loans like a mortgage and multiple credit cards. Adding new trade lines can help mitigate the effect of a negative trade line. Some of the easiest trade lines to add to your report are secured accounts -- credit cards backed by collateral -- and retail or department store credit cards.