Does your credit look like a train wreck? I've talked to several clients recently who hit a rough spot - and are working their way out. They had some questions I thought other people might need answered too!
How long does negative information stay on a credit report?
The Fair Credit Reporting Act says that negative information can stay on your report for a minimum of seven years (I always thought that said MAXIMUM - but I was wrong). There are some exceptions to this:
* Delinquency information like late payments remain for seven years from the DATE OF DELINQUENCY.
* Charge-offs stay for seven years PLUS 180 days from the date reported to the credit bureau.
* Student loan defaults report for seven years.
* Foreclosures stay on your report for seven years. The seven year rule also applies to Law suits, judgments and paid tax liens.
* Bankruptcy stays for 10 years from the date you file.*
* UNPAID TAXES stay on your report for 15 years! Ouch!
I read that 2 of the 3 major reporting bureaus have started to re-visit their reporting policies. For people with good credit, their rating should just get a little better. For people with bad credit, there shouldn't be much change.
One thing is certain, as we ride this tidal wave of foreclosures, the entire credit reporting system will have to be revamped or at the very least mortgage underwriters will have to build in a certain tolerance for a foreclosure on someone credit report. Millions of Americans are losing their homes to foreclosure - it's time for changes.