One of our clients recently said that someone told them that just because something is supposed to come off your credit report in seven years, doesn’t mean it happens right away.  They said it could take a few months to come off.

Well, our focus at Complete Credit Services is credit score building through education.  We know that for consumers to get better credit scores, they need to understand how the credit reporting and scoring formulas work.

The Fair Credit Reporting Act, FCRA, and its amendment, the Fair and Accurate Credit Transactions Act, FACTA, are the guiding regulations for consumer credit reporting.  The Federal Trade Commission, FTC, is the regulatory agency that oversees credit bureaus and consumer credit issues.

The FCRA spells out the time limits that certain items can be reported on a consumer’s credit file.  This article provides details on everything on the credit report and the statute of limitations for each.

Today, we are going to talk about negative items such as late payments and charged off accounts. 

A late payment on the credit report, whether it is a 30 day, 60 day, 90 day or 120+ day late payment, can only be reported for seven years from that date.  For instance, a 30 day late payment from October 2002 will come off in October 2009. 
NOTE: The credit bureaus often remove it the month before to assure compliance with the FCRA.  In the example above, the 30 day late from October 2002 could come off in September 2009.

An account that was “charged-off” usually shows several months of consecutive late payments leading up to the company writing it off as uncollectable debt and reporting it to the credit bureaus as a charge off.  Those individual late payments will come off at their respective seven year limit.  However, a delinquent account placed for collection or charged off can remain on the credit report for 7.5 years.  Section 605c of the FCRA states that the seven year reporting period for these accounts begins 180 days after the first delinquency that led to the charge off.
BOTTOM LINE: collections and charge-offs come off the credit report  7 1/2 years after the first delinquency that led to the charge off or collection.

NOTE: The “date opened” on collection accounts is NOT necessarily, and is usually not, the date to use for determining the reporting period. 

Judgments can stay on the credit report for seven years from the date the judgment was FILED, or until the governing statute of limitations has expired, whichever is longer.  Example: a judgment filed in January 2003 will come off in January 2010 unless the state regulations allow it to come off sooner.

Paid tax liens come off the credit report seven years from the date they were paid.   Example: a tax lien filed in February 2000 that was paid in December 2002 will come off the credit file in December 2009.

WHAT TO DO
Check your credit reports regularly.  Look at the dates of any negative items.  Mark your calendar or planner with the dates of those items coming off in the next year.
NOTE: Some of the credit reports list the estimated date of removal for the negative items.

Write to each of the three credit bureaus near the end of the month that the negative item is to be removed.  List the account name, account number, the item to be remove and what you want them to do. 
Example: Capital One, #1234567891011121: late payment past reporting limits – DELETE.

Look over the updated credit reports that you receive from the credit bureaus in response to your correction letter.  Make sure the item came off and check for any other errors that may be on there.
NOTE: these reports do NOT count toward your free annual reports.

To answer our original question: Is 7 years really 7 years?  YES.  The negative item such as a late payment must come off your credit report seven years from the time it happened.  It should NOT take 2-3 months for it to be removed, it should be gone by the end of the month it originally happened in.  If an item is still on your credit report 2-3 months after the seven year reporting limit expired, it is a violation of your consumer rights per the FCRA.  Reminding the credit bureaus of that fact in the correction letter usually expedites the removal process.

Thanks, KD, for a great question and inspiration for this article!

We work with people all across the US and Canada who have questions and need assistance with their credit report corrections.  Contact us today for your personalized credit building services.