How Long Negative Items Remain on Your Credit Report

Negative credit report entries can significantly impact your credit scores and are viewed by lenders as signs of imperfect credit habits. These entries remain on your credit report for up to seven years, with the exception of Chapter 7 bankruptcy, which lasts for 10 years.

The countdown for the expiration of negative entries starts from different points depending on the type of entry:

• Defaults: Seven years from the original delinquency date. A default is recorded if you go 90 days without making a scheduled payment on a loan or credit account.
• Accounts in collections: Seven years from the original delinquency date. Accounts are typically turned over to collection agencies after several months of missed payments.
• Foreclosures: Seven years from the original delinquency date. Mortgage lenders can initiate foreclosure after 90 days without receiving a scheduled payment, and property seizure can occur after no fewer than 120 days without a payment.
• Late payments: Seven years. Missed payments that don’t lead to more serious negative events expire from your credit report after seven years.
• Chapter 13 bankruptcy: Seven years after the date it was filed. This type of bankruptcy calls for full or partial repayment of creditors.
• Chapter 7 bankruptcy: Ten years after the filing date. This type of bankruptcy allows you to keep exempt property, sell certain property to repay debts, and then discharges the remaining debts.

How Long Positive Items Remain on Your Credit Report

Positive entries, which benefit your credit scores, remain on your credit report for at least 10 years. Examples include:

• Closed, positive accounts with no negative history: Ten years from the closure date. Installment loans paid off as agreed and credit card accounts in good standing that you choose to close remain on your credit reports for 10 years.
• Open accounts in good standing: May remain indefinitely. The payment history on credit card accounts that remain open can stay on your credit reports indefinitely, contributing to the length of your credit history and your record of timely payments.

How to Improve Your Credit

If your credit reports contain some negative entries, your credit scores may be suffering. However, there are time-tested steps you can take to improve your credit scores:

• Pay your bills on time: Your record of paying on time is one of the most important factors in your credit score. Even one delinquency can do serious harm to your scores. Getting in the habit of paying your bills on or before their due dates is a great tactic for improving your credit.
• Avoid high card balances: Credit utilization plays a significant role in determining credit scores. Utilization that exceeds about 30% of your available credit limit can hurt your credit scores.
• Apply for new credit only as needed: Hard inquiries can cause short-term dips in your credit scores. Applying for multiple credit cards or loans in a short period can generate multiple hard inquiries with a cumulative negative effect on your credit scores.
• Cultivate a healthy mix of credit accounts: Lenders and credit scoring systems value individuals who can manage multiple debt types successfully. A combination of revolving accounts and installment loans will favor credit score improvement.
• Stay the course: Negative entries eventually expire from your credit reports. The longer your history with specific cards or loans, the greater chances for score improvements. Maintain good credit habits and avoid additional missteps to see your credit scores rebound and increase.

The Bottom Line

Seven years (or 10 years for Chapter 7 bankruptcy) may feel like a long time to wait, but it’s not forever. In many cases, an event’s negative impact on your credit scores will dwindle long before its entry disappears if you focus on building good credit habits in the meantime. If your credit is bouncing back from negative events, you can track your scores’ recovery by checking your credit score from Experian for free each month.

At O1ne Mortgage, we understand the importance of maintaining a healthy credit score. If you need assistance with your mortgage services, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you every step of the way.