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Negative Credit Reporting Has A Specified Statute Of Limitations

Negative credit must be removed from your credit report within a specified time period due to provisions within the Fair Credit Reporting Act or the FCRA that was enacted into law back in 1970. This law came about in order to protect consumers from unfair credit reporting.

The majority of credit reports contain some types of errors. If you happen to find some inaccuracies or mistakes showing on your report you can send in a dispute and attempt to get them removed. The credit bureaus must verify the accuracy of their information within a 30-day period following receipt of your dispute or they must delete the disputed information.

But if the information is completely truthful and accurate it should remain on your report for a specified period of time that has been established by the FCRA. When the statute of limitations runs out the negative item must be removed.

All of the time limits for reporting begin at the time of the first date of delinquency. Therefore any payments, partial payments or other types of activity on the account will not affect the reporting. There are however, two items that can stay on the report forever if they never get paid and that is an unpaid tax lien and unpaid Federal student loans. If these items are paid off though, they will be removed after the typical time limit passes.

The majority of negative credit items are scheduled to be deleted from your credit report in 7 years from the date of the first delinquency regardless of whether they are ever paid off or not. In the case of multiple late payments on one account, each late payment will be treated separately and will drop off 7 years from the day it was late. A chapter 13 bankruptcy should also be deleted after 7 years along with tax liens and student loans that have been paid in full.

In the case of a charge-off and most collection accounts the time period is 7 years plus 180 days from the date of first delinquency. That is because it typically takes at least 180 days for the original lender to charge-off the delinquent debt. Even though collection accounts are often passed along to different collectors, these exchanges cannot affect the reporting on your credit report. All of these types of items must drop off the credit report in 7 years plus 180 days from the date of the first delinquency.

There are a couple of variances from the 7-year rule. A bankruptcy that is a chapter 7 must remain on the report for 10 years. Of course, unpaid tax liens and unpaid Federal student loans can stay on there forever. As for inquiries, a soft inquiry, which is what happens when you look at your own report, does not affect the report but all hard inquiries from lenders stay on the report for 2 years.

It takes time but even if you do nothing eventually all of your bad credit will be removed from your credit report. However, while you are waiting you can take some steps to make improvements and raise your credit score. The most important thing however, is to keep your credit good so that when the bad credit drops off you can again have excellent credit.

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