Poor payment history recorded on your credit report can get in your way, when applying for future loans or financing, but those items on your credit report do not have to haunt you forever. Most items only need to be reported for a specific period of time. When those time limits expire, you can have negative items removed to drastically improve your credit score.
Your credit report contains many different items that indicate your payment history to lenders. These items include account payment information on specific types of accounts (credit cards, retail cards, finance companies, mortgages and loans, etc.), the delinquency of those accounts (how long payments are past due), the frequency of past-due items, the number of past-due items and adverse public records (bankruptcies, judgments, wage garnishments, etc.). While these items may negatively affect your credit score, they will not be listed on your credit report forever.
The general rule for the length of time items must remain on your credit report is seven years. Once an account is closed or paid off, your credit report should reflect the updated status within 30 – 60 days. But the negative information about the account may remain on your report for seven years, starting from the date of last activity or the date from which the file was closed. As time goes by, delinquent payment history or collections history will have less and less impact on your credit score, but that history may still prevent you from obtaining additional credit or financing.
Other items may stay on your report for longer than seven years, and certain pieces of information may remain on your credit report indefinitely. Inquiries (anytime someone looks at your credit report to determine your credit worthiness for financing) may stay on your report for two years. Information about criminal convictions may be reported forever. Bankruptcies may last on a credit report for up to 10 years. Any information in response to a job application for a salary of more than $75,000 or any application for credit or life insurance exceeding $150,000 may be reported without a time limit. Also, information about a lawsuit or an unpaid judgment against you may be reported for seven years or until the statute of limitations runs out.
The best option for limiting the negative impact that these items can have on your credit worthiness is to have them removed from your credit report. Any delinquent payment information or information regarding accounts that have been paid-off (after being sent to collections) can be disputed and removed seven years from the date they were paid (or bankruptcies that have reached the ten year limit). It is imperative to keep copies of your payments to debt collectors, so that you can prove when the account was paid off, thereby strengthening your dispute. If you currently owe a debt collector, you may be able to negotiate deletion for payment, meaning that the collector will agree to remove their account from your credit report when you pay in full. Negotiate this agreement in writing, so that you have proof of the request in case the collector fails to remove the negative item from your report after payment.
Navigating the dispute process by yourself can be challenging. If you have items that you feel should no longer be on your credit report, contact a dispute manager at Ovation. Dispute managers are experts in filing legal disputes that are in compliance with the FCRA. Negative items on your report do not have to haunt you forever.