Does Bad Credit Go Away After 7 Years?

Do you know how long bad credit can stay on your credit report? Learn how NOT paying on some debts can actually improve your credit.

Does Bad Credit Go Away After 7 Years?

Many people have heard that after 7 years negative information on your credit report will be erased. This is probably most talked about by people afflicted with bad credit. But, it’s not that simple, there are rules and exceptions to these rules. When you’re looking at your credit report there are a few things you should know concerning how long an bad credit item can stay on your credit report and when you can request an item be removed. If you’re applying for a major loan such as a mortgage knowing when some of the negative items will be removed from your credit report can assist you in choosing the best time to apply for your loan and get the best rates.

When Does The 7 Years Start?

For most negative items such as late payments, collections, and charge offs the seven years start from their date of last activity. That means if you make a payment on a charge off or collection account the 7 years starts from the date of that payment, not from the original date of the charge off or collection activity. That’s why in the case of older debts paying it off may not be the best option unless you have an agreement with the company to remove the negative information from your credit report. If not you will continue to have that bad credit information on your credit report. This can cause a significant problem when applying for a mortgage or other large loan due to possible increase in the interest rates you’ll qualify for.

What Does Not Go Away After 7 Years?

There are many bad credit items that do not go away after 7 years. Many of these are items that go through the courts or are government debts, such as bankruptcy, unpaid tax liens, judgments, child support obligations and defaulted student loans. Many of these can stay on your credit report for up to 10 – 15 years from the date they were paid or the date of their legal disposition. Each one of these debts have different reporting times depending on the type of debt. Positive information may remain on your report indefinitely and paid closed accounts will display for up to 10 years.

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