Does Poor Credit Drop Off After Seven Years?

Consumer credit reports provide a picture of an individual's financial well-being at a specific point in time. In order to give consumers a chance to improve their financial health, the Fair Credit Reporting Act (FCRA) stipulates that poor credit entries on a consumer credit report be removed after seven years, in some cases. Certain types of poor credit information may remain as part of a consumer credit report for significantly longer than seven years, depending on several variables.

Credit Cards

Original creditors, collection agencies and debt buyers can legally report credit card and other payment delinquencies and charge-offs for seven years. While these items are supposed to drop off after seven years automatically, consumers should monitor their credit reports to ensure compliance. Consumers can file a dispute with credit reporting agencies to have the listing removed after seven years. While the credit must be removed, the debt may still be collectible, depending on the consumer's state statute of limitation laws.

Tax Liens and Judgments

Paid tax liens that precede the credit file by more than seven years should drop off of a consumer credit report. The seven-year clock begins on the date that the tax lien was paid in full. Judgments are part of the consumer's public record and may be listed on her credit file for at least seven years. If the consumer's state of residence allows judgments to remain valid for longer than seven years, the poor credit listing will remain on the credit report for the life of the judgment.

Student Loans

Poor credit listings as a result in delinquent or defaulted federal government-guaranteed or insured student loans and national direct student loans do not fall off after seven years. These negative listing on a consumer credit report may remain up to seven years after the loan is paid in full. This means that the seven year credit reporting time clock starts after the loan is paid, not after the date of last activity. If you never pay off the student loans, the negative entry will remain part of your credit file indefinitely.

Bankruptcy

Filing for Chapter 7 or Chapter 13 bankruptcy can remove poor credit listings from a consumer credit file for accounts covered in the bankruptcy. Bankruptcies can remain as part of a credit report for up to 10 years after the bankruptcy is discharged, not seven.