How Long Does It Stay On my Credit Report?

The passage of time is the only way that verifiable accurate negative information can be removed from your credit report. Negative information stays on your report for 7 years from the original delinquency date. Then it is automatically deleted by the credit reporting agencies.

Actually, it will be 7 years and 180 days

For derogatory accounts added to your credit file since December 29, 1997, the length of time on your credit report will be 7 years and 180 days. This is according to the Consumer Credit Reporting Reform Act of 1996 which amended the Fair Credit Reporting Act.  (You've got until late 2004 before you need to worry about this.)

When does the delinquency period start?

"I was late, I caught up, then I was late again. Then I paid it off." So just how does the credit reporting agency decide when the 7 year period starts?

The 7 year period in which the bad credit can be reported is from the date the first payment was missed at the start of the last delinquency.

Example

You were 30 days late in July of 1996. 60 days late in August of 1996. Then you caught up.  You were 30 days late in January of 2000, 60 days late in February of 2000, and 90 days late in March of 2000, when your account was sent to collection. This derogatory information will stay on your credit report through June of 2007.  (7 years + 180 days from the date of the commencement of the delinquency which immediately preceded the collection activity.)

The $75,000 Exception

Section 605 of the Fair Credit Reporting Act prohibits consumer reporting agencies from providing adverse information that is more than seven years old (ten years in the case of bankruptcies) for employment purposes where the annual salary is less than $75,000. There are no restrictions upon reporting adverse information for jobs involving salaries of more than $75,000.

Can they Use Old Derogatory Information?

While there may be prohibition on the reporting of information, there is no prohibition on the use of information that is more than seven years old. If a creditor has information in its own files, it can use that information to deny credit, even after 7 years (or 10 years, in the case of bankruptcies.) Employers also can rely upon old adverse information, no matter how they obtain it.

The seven and ten year restrictions apply only to credit reporting agencies in reporting of derogatory credit information, under the Fair Credit Reporting Act.