If a creditor reports an issue on your credit report, it's important to know exactly how long that item will show on your credit history. Negative information can prevent you from accomplishing financial goals, such as securing a loan. Though it may take a while, all charges on your credit history must expire at some point in the future according to Fair Credit Reporting Act (FCRA) rules.
Negative Items on Credit Report
A negative item on a credit report is anything out of the ordinary that paints a negative picture of the borrower's status as a bill-paying consumer. Creditors, banks and service providers report information regarding the consumer's payment activity regularly, usually monthly. When the borrower retrieves his credit report, the agency commonly displays any negative information in a summary at the beginning so that the consumer can address those issues immediately.
Late Payments
A late payment is recorded on a credit history when the borrower pays a debt account more than 30 days late. Every additional 30 days another negative charge gets reported, including 60, 90 and 120 days. After that the creditor commonly lists the account in "charge-off" status. This information about late payments and charge-offs stays on the credit report for seven years.
Bankruptcies, Foreclosures, Liens
Another negative item that may appear on a consumer's credit report due to a debt is a bankruptcy. A chapter 13 bankruptcy stays on a consumer's report for seven years while chapter 7, 11 and 12 filings remain for 10 years. In the case of a foreclosure (failure to honor a mortgage agreement), that information remains on the report for at least seven years. Liens due to unpaid taxes stay on the report for 15 years.
Additional Information
Not all negative information listed on a credit history is correct. If you retrieve your report and notice a negative item that you do not recognize, you must dispute it with the credit reporting agency immediately. Also, though most negative information is supposed to drop off of your credit report after seven years, some creditors may try to extend or reset the listing if you contact them before the time expires. This is called "reaging" --- you can dispute this practice with the credit bureaus.
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