The shelf life of bad credit

The Shelf Life of Bad Credit

When a credit card bill, loan payment or other financial obligation is not paid as agreed, lenders may send a negative report to credit reporting agencies such as Equifax, Experian, and TransUnion, known in the U.S. as “the big three.” According to Equifax, consumers inquire most often about how long negative information will remain on their credit report.1 Considering the importance of a good credit profile and credit scores, it’s not surprising that this is a topic of great concern among consumers. As you might know, a bad credit score can affect your ability to qualify for a loan, rent an apartment or even get a job.

According to the Fair Credit Reporting Act (“FCRA”)2, negative information can remain on your credit report for up to seven years.3 Additionally, bankruptcies will follow you for 10 years, and unpaid tax liens stay in your credit history indefinitely. Those kinds of scenarios can be very daunting. For example, in the next seven to ten years you may need a new loan, such as a car loan or credit card. A low credit score can cause you to be denied for a loan, or may mean a higher interest rate, or larger down payment requirement.


Debts that remain on your credit report for seven years

Late payments, unpaid bills, and public records like these can be reported by Equifax, Experian and TransUnion for up to seven years from the date of delinquency:*

  • Credit cards
  • Student loan defaults
  • Medical bills
  • Installment loans
  • Foreclosures
  • Collection accounts
  • Paid tax liens
  • Judgments resulting from lawsuits

If the information on your credit report is accurate, there is no way to have a bad debt removed prior to the expiration date.4 It should be automatically removed at the expiration date, but you should check to be sure. Contact the credit bureau if expired information is not removed in a timely manner.


Highlight your positive credit information

If you currently have accurate, but negative, information in your credit report, one of the best actions you can take is to pay all your bills on time going forward. Positive credit information, like on-time payments, usually remains on your credit report for at least 10 years from your last payment date. That will help improve your overall credit score.5

The FCRA allows you to add information to your report if it will help you qualify for credit.6 Examples include unreported repaid debts, and utility and rent payments that demonstrate your creditworthiness. Send this information to the credit bureaus via certified mail, asking them to verify it with the creditor(s) and list the accounts in your credit report.

The law also entitles you to a free credit report every year. As a consumer, you should take advantage of that, regardless of your credit status. To obtain your report, visit, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.


*Laws differ slightly in California and New York. Check with one of the big three credit reporting agencies if you are a resident of one of these states.

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