Credit. Your credit is the key that unlocks a lot of opportunities, and whether we like to admit it or not we need those opportunities in order to keep moving forward. You don’t want to wait until the last minute to pursue these opportunities, not when there are so many different things that you can be doing with credit. If you wanted to start a business, good credit can help get you there. If you wanted to get your first home, credit will help get you there.
For most things, the first step in getting started is looking at your credit report and really looking at what’s there. If you have negative information there — like collections, liens, judgments, and late payments — you might wonder how long that information stays. Let’s take a look at that. And yes, it’s true that all of these negative things can be removed. We’ll cover this as well.
This is going to be late payments and collections, and if they’re on your credit report they’re going to hang around for a while. How long? Well, about seven years.
What’s a charge-off? Well, it’s when the original creditor has a debt for you that they realize just aren’t going to be paid by you. After six months of non-payment, your creditor generally determines that they aren’t going to be able to collect on the debt in question. Believe it or not, they can still collect on a charge-off, and it is still valid. These debts remain on your credit report for seven years, plus 180 days from the date that they were first reported.
Been sued due to bad credit? It’s not as uncommon as you think. If you’ve been taken to court and there’s been a judgment ordered against you, you will have to pay that amount. What’s worse is that it’s documented on your credit report. It lasts there for seven years from the date first filed.
Declaring bankruptcy can often be the best thing to do — but that doesn’t mean it comes without a cost. Bankruptcy hangs around for 10 years from the date that you file. That’s a long time, which means that all future creditors will know that you filed a bankruptcy.
Can you get these things removed? Certainly. What you can do is called a “pay for delete” in slang terms, and this is where the creditor accepts payment from you in exchange for allowing the information to be deleted from your credit report. This is the only way to “beat the clock”, but it’s not 100 percent guaranteed. Not every creditor will agree to it, and the ones that agree to it can still take a while to get back to you.
However, if you want to go in that direction, you will spend a long time writing letters — and sending them certified mail, return receipt requested of course!
Overall, now that you know how long negative information lasts, you can plan better in the future. That’s all there is to it!