We’re always reminded about how important it is to keep our credit scores in good shape. With credit scores being very critical in many aspects in our daily financial lives, it makes sense that we do our best to keep our credit scores as high as possible.
But despite our best efforts, unfortunately, we sometimes make mistakes, and those mistakes are enough to land on our credit reports. This is bad because these black marks on our credit reports will affect our credit scores, eventually making everything from getting a credit card to getting a loan or a mortgage much more difficult.
This harsh reality leads most to ask how long these negative remarks will remain on our credit reports. The good news is that, these negative remarks will eventually disappear from our credit reports, but the bad thing is it will take some time.
The 7-Year Rule
As per rules, most negative marks will remain for seven years on your credit report. If any of the below items apply to you, then you’re stuck with them for up to 7 years. Here it goes:
• Late payments
• A Foreclosure
• A debt that’s been sent for collections
• A bankruptcy (chapter 13)
• Defaulted student loans
• Paid, released, withdrawn tax liens
Exceptions To The 7-Year Rule
Unfortunately, some of these slip-ups can remain on your credit report for more than 7 years.
• A chapter 7 bankruptcy will remain on your credit report for 10 years.
• Tax liens that are unpaid will stay on your credit report forever.
However, there are some important things to keep in mind about the items that stay on your credit report for 7 years.
One, the negative impact these items have on your credit score will lessen over time. For example, a foreclosure will impact you very badly the year after it happened, but 5 years later, it won’t pinch you that much, even though it still remains on your credit report.
Two, it’s important to keep track when a negative mark appears on your credit report for the first time. This is because it should fall within 7 years after first being listed. It doesn’t matter how many times it’s been paid off or sold to another company.
Three, if you see a number of negative items on your credit report, make sure that they’re all true. If you’ve been bad with your finances in the past, it’s understandable that you can lose track of some of your accounts, and just assume that everything on your report is yours. Don’t be passive, errors on credit reports are common, so trace them all, and ensure that they’re all accurate.