Although most adults have a credit report (and credit score), few people check them regularly — if at all. Even worse, many Americans have no idea what their credit report reveals about their spending habits, accumulated debt, or financial future. Surveys indicate that only about one-third of Americans have reviewed their credit report in the past year. This lack of awareness partly explains why credit scores and credit reports remain a mystery to many. One common question is, “how long do things stay on your credit report?”
Some people wrongly assume that a credit report is a permanent financial record, where every late payment or unpaid credit card debt follows you for life. However, that’s not the case. Almost everything on your credit report will eventually expire and disappear. In most cases, this is beneficial. However, it can also have downsides, which we’ll explain shortly. So if you’ve ever wondered how long something will stick around on your credit report, let’s debunk some misconceptions and shed light on the facts.
The Seven Year Rule
In most cases, items that negatively impact your credit score remain on your report for seven years. The Fair Credit Reporting Act, a federal statute, dictates how long certain information can legally stay on a credit report. With a few notable exceptions, the standard duration is seven years.
As we’ll explore later in the article, positive items that can boost your credit score typically remain for ten years. This is advantageous, as these positive marks can help offset and even outlast any negative items on your credit report. Here’s a brief overview of the negative items that will stay on your credit report for seven years.
Late or Missed Payments
The good news is that most payments have a 30-day grace period before they become a black mark on your credit report. Companies typically understand if you’re occasionally a day or two late, perhaps due to waiting for your paycheck or a banking delay. These minor delays are usually no big deal as long as they don’t happen frequently.
However, if a payment is more than 30 days late, it will appear on your credit report and remain there for seven years, even if you promptly settled the debt. On your credit report, this may be noted as “one or more of your accounts was 30, 60, 90, 120, 150, or 180 days past due.” Naturally, the later the payment, the more it will negatively impact your credit score.
Collection Accounts
Late payments are bad enough, especially if you have multiple instances. However, not paying at all is even worse. If you refuse to pay your bills, there’s a high chance those debts will be sent to a collection agency. This means the service provider (like a cell phone company) sells your debt to a third party, often at a discount. The collection agency then takes over, attempting to collect the payment from you.
Even if you eventually settle with the collection agency, the damage is already done. That black mark will remain on your credit report for seven years. Having any debt go to collections can cause your credit score to drop significantly. Therefore, it’s crucial to try and settle bills directly with the original company, even if you’re facing financial difficulties. Many companies are willing to work out a payment plan. Ignoring the bills and letting them end up in collections is always a bad move.
Charge-Offs
A charge-off occurs when a lender closes an account because they no longer believe you can repay the debt. This typically happens with credit cards, lines of credit, or monthly billed services like cable TV or home internet. Although you lose access to the product, you are still responsible for the debt.
Charge-offs are significant negative marks on your credit report, remaining for seven years and severely impacting your score. Ignoring a charge-off can lead to the debt being sent to collections, compounding the damage to your credit (see above). Moreover, a charge-off signals that companies have lost confidence in your ability to pay your bills, which can prompt other creditors to follow suit.
Bankruptcy (Chapter 13)
Few things are as damaging to a credit report as a bankruptcy filing. In a Chapter 13 bankruptcy, borrowers with a stable income agree to a repayment plan set by the lender, typically paying off a substantial portion of their debt within three to five years. Afterward, any remaining balance may be discharged. This type of bankruptcy stays on a credit report for seven years.
Chapter 11 bankruptcy follows a similar process but is usually reserved for companies rather than individuals. Chapter 7 bankruptcy is even more detrimental to your credit score, which we’ll cover in the next section. Regardless of the type, filing for bankruptcy should always be considered a last resort.
What Stays on Your Credit Report Even Longer?
Certain items can remain on your credit report for longer than seven years. While this often includes extremely damaging financial records, positive entries can also persist, benefiting your credit score. Here’s a breakdown of what to expect.
Chapter Seven Bankruptcy (10 years)
A Chapter 7 bankruptcy, often referred to as a “straightforward bankruptcy,” involves claiming insolvency to escape debt entirely, without a repayment plan. This type of bankruptcy is viewed less favorably by credit agencies compared to Chapter 13, which involves restructuring debt and creating a payment plan.
Filing for any type of bankruptcy should be a last resort. A Chapter 7 bankruptcy remains on your credit report for ten years. Given that your credit score is most relevant from the time you turn 18 until retirement, ten years is a significant portion of that period.
Open Accounts In Good Standing (Indefinitely)
Now for some good news: not everything on your credit report has to be negative. Several items can positively impact your score. For example, open accounts on revolving credit products—such as credit cards and lines of credit—can be beneficial. If you use these products responsibly and always make your payments on time, they will remain on your credit report indefinitely as long as you keep the account open and active.
Having credit accounts in good standing can significantly boost your credit score. It demonstrates a long history of responsible credit use, which is a major component of your credit score. Therefore, maintaining these good standing accounts on your credit report should always be a priority.
Closed Accounts In Good Standing (10 years)
Even if you need to close one of your revolving credit accounts, all is not lost. Closed accounts in good standing typically remain on your credit report for ten years. This extended benefit can help counteract any other blemishes on your report, providing a buffer for your credit score.
However, these accounts will eventually drop off your report, which is why many financial experts recommend never canceling an old credit card. Even if you upgrade to one with better rewards, a lower interest rate, or a higher credit limit, it usually benefits your credit score to keep the old account open. This approach positively contributes to your credit history and improves your credit utilization ratio.
Hard and Soft Credit Inquiries
You’ve probably come across the terms “soft pull” or “hard pull” in relation to credit inquiries. Whether referred to as “hard hits” or “hard inquiries,” these actions occur when companies request your credit details, affecting your credit score. Whether it’s for a new credit card, a car loan, or a mortgage, each inquiry leaves a mark on your credit profile.
The good news is that these inquiries typically don’t have a significant impact on your credit score. A “soft pull,” often part of a background check or pre-approval process, doesn’t affect your score at all. Even a hard pull, resulting from credit applications, usually stays on your report for only a year or two. These inquiries are generally viewed as neutral events. While a single hard pull might cause a temporary dip in your credit score, it typically rebounds within a few weeks.
Repeated Credit Inquiries (or Credit Checks)
The main risk associated with credit inquiries arises when they occur excessively within a short timeframe. A flurry of credit inquiries on your report signals to credit agencies that you may urgently need to borrow money, which is generally viewed negatively.
However, there’s a grace period for shopping around. For instance, if you’re exploring different lenders for a car loan, each may conduct a credit check to determine your eligibility for terms or interest rates. Fortunately, credit agencies consolidate multiple hard pulls made within a brief window, typically 15 or 30 days, into a single inquiry. This grouping ensures that these inquiries are treated as a single event rather than multiple hits on your credit report.
How To Help Your Credit Score
Here’s more good news: you can take various steps to boost your credit score. Of course, responsible credit usage is paramount, but there are also proactive measures you can take to actively enhance your score. While we won’t cover all the strategies here, we have dedicated articles aimed at assisting readers in improving their credit scores.
Since this article focuses on the duration of items on your credit report, here’s an additional tip. If there’s a negative mark on your report that you believe should be removed early, you might be able to achieve this simply by asking. Yes, it could be that straightforward. For instance, let’s say you have an old delinquent account or missed payment lingering on your otherwise solid credit report, which you’ve since settled. In such cases, consider sending a “goodwill letter” to the credit agencies or the relevant company. Explain your past financial challenges and highlight the steps you’ve taken to rectify them. Politely request that they remove the blemish as a gesture of goodwill. While there’s no guarantee of success, it’s worth the effort to inquire!
In Conclusion
The timeline for how quickly positive actions affect a credit score isn’t always clear, but most negative events typically fade within a few years, except for bankruptcy filings, which can linger for seven to ten years. Given the importance of the information in your credit report, it’s wise to check your report and score annually with one of the three major U.S. credit agencies—Equifax, Experian, and TransUnion.
If you discover old negative marks on your report that you believe should be removed, consider sending a “goodwill letter” to the relevant credit agency, asking them to remove the items in question. While there’s no guarantee they’ll comply, it’s worth a try. Additionally, in cases of financial hardship, such as job loss or impacts from events like the Covid-19 pandemic, you may be able to appeal to the credit agency based on these circumstances. Again, results aren’t guaranteed, but advocating for yourself is always worthwhile.