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Seven Years of History & Credit Reports

How far back in years do Equifax or TransUnion go to obtain credit history? I heard credit reports clear themselves.

How far back in years do Equifax or TransUnion go to obtain credit history? I have heard that credit reports clear themselves after seven years, but if you have long active loan account wont the bank report the entire length to the credit info agency?

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Updated: Oct 20, 2014

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Before I answer your question, we need to review the federal and state laws in play here.

Credit Report Rules at a Glance

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for up to 7½ years. To determine when an account will be removed by the CRAs (TransUnion, Equifax, and Experian and others), add 7 years to the date of first delinquency. The date of first delinquency is shown in credit reports. Subsequent activity, such as resolving the debt or one debt collector selling the debt to another collector, is irrelevant to the 7-year rule.

Some debts have a reporting period longer than 7 years, including:

  • Tax liens: 10 years if unpaid, or 7 years from the payment date
  • Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
  • Perkins student loans: Until paid in full (20 U.S.C. §1087cc(c)(3))
  • Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
  • Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer

The FCRA 7-year rule is separate from state statutes of limitations for debt issues. Learn the lifespan of a judgment in your state at the Bills.com Statute of Limitations Laws by State page.

The start of the seven-year period begins at the date of first delinquency, or if no payments are made, when the first payment was due. Review your credit report carefully to make certain the dates of first delinquency are reported correctly. Unscrupulous collection agents reset the date of first delinquency to stretch out how long a derogatory account appears on consumer’s credit report. This is illegal under the FCRA.

Just because a debt does not appear on a credit report does not mean the statute of limitations for the debt has passed. The opposite is also true: The passing of a state statute of limitations on a debt does not mean the debt may not appear on a credit report. The federal FCRA and state statutes of limitations are separate and independent of each other.

Whether a debt appears on a credit report does not establish legal liability for the debt. The opposite is also true: You may have legal liability for a debt not reported to the credit reporting agencies. Credit reports are not legal records of every debt a person owes.

Credit Reporting Agencies Must Publish Accurate Data

Under the FCRA, all trade lines can be reported on each of the credit bureaus. However, the reporting agencies must update and keep accurate data in their credit files. If there is erroneous information (like a collection account, that you believe is inaccurate), you must notify them (typically through a certified letter) and then wait one reporting cycle (90 days) for the errors to be removed.

There are three major credit bureaus that offer credit reports, if there is something that you want added or removed, you should contact them directly:

Since you are asking about credit updates, you might also be interested in how your credit score is calculated. Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. Paying off delinquent or maxed out trade-lines will almost always help your credit score.

Five Factors in a Credit Score

There are five key factors that go into calculating your credit score, with certain items carrying more weight than others. These factors are as follows:

1) Payment history, which counts for approximately 35% of your score, is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area. If you have delinquent payments, the older the delinquency the less the negative impact on your score will be. Collection accounts and bankruptcy filings are also taken into consideration when analyzing your payment history.

2) Total debt and total available credit, which counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts. If all of your accounts are maxed out, you will be considered a poor credit risk, because it appears that you are struggling to pay off the debt you have already incurred. If your account balances are relatively low compared to your available credit, this part of the risk analysis should help your overall credit score. The score calculation also looks at these two factors independently. Having too much available credit, whether you have used it or not, could hurt your credit score, as statistical studies have shown that people with excessive amounts of available credit are a higher credit risk. Unfortunately, the bureaus do not define exactly what they consider excessive, so best tip is to use credit conservatively and to keep your debt to credit limit ratio low.

3) Length of positive credit history, which counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments.

4) Mix of types of credit, which counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score. Having too much of one type of credit can have a negative impact.

5) The number of new credit applications you have recently completed, which accounts for about 10% of your score. Applying for too much new credit in a short time period makes indicates that you could be credit risk, as you may be desperately trying to keep your head above water. The models make an exception for people who are shopping around for a loan, so if you are simply applying to see who can give you the best rate on a new loan, you need not worry too much about damaging your credit score.

While you cannot realistically calculate your own credit score, you can review your credit report for on the five factors I named above to get an idea of whether the accounts listed on your credit report are hurting or helping your credit score. You can then take action to improve any potential problems, such as paying down your balances or paying off collection items.

Also, factors such as age, sex, income, and length of employment, have no direct affect on your credit score, and are not considered when the bureaus calculate your score. Keep in mind that for most lenders, your credit score is only one aspect, albeit an important one, of your overall “credit worthiness,” meaning the creditor’s view of your ability to repay a loan. Your income, for example, is not considered in the calculation of your FICO score, but most lenders will ask you what you earn to analyze your ability to repay the loan. Even if you have an 800 FICO score, if your income is only $10,000/year, a lender will probably not loan you a large sum of money, because despite your past credit habits as measured by your FICO score, the lender can see that you probably cannot afford to repay the loan.

If you would like to learn more about credit reports, credit scoring, and what it means to you, I encourage you to explore the wealth of material offered by Bills.com at Credit Help Information & Resources.

I hope this information helps you Find. Learn. Save.

Best,

Bill

Bills.com

16 Comments

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  • JC
    Apr, 2012
    Jen
    I want to make sure about this 7.5-year rule. I have a credit card that keeps accruing fees even though it has been delinquent since 2009. Is this just a scare tactic? I planned on just waiting out the 7.5 years on my credit card debt as I pay cash for everything and my now husband has excellent credit. Is there anything I need to do. There are so many collection agencies that have some of my other accounts that I heard even if you settle with them it doesn't ensure that it will get taken off the report as resolved. Is this true? Any advice is greatly appreciated. Just trying to get back on my feet after a very tough financial situation that happened to me in 2009. Many thanks!!! Jen
    0 Votes

    • BA
      Apr, 2012
      Bill
      The 7½-year rule, which is set by the Fair Credit Reporting Act, concerns how long a derogatory item may appear on a credit report. The 7½-years starts at the date of first delinquency, and may not be reset by the original creditor or a collection agent unless the consumer gives his or her say-so. A derogatory is not removed when a consumer pays a delinquent debt.

      Note the 7½-year rule does not concern how long an original creditor or collection agent may attempt to collect the debt. The 7½-year rule is also not related to a state's statute of limitations for debt.
      0 Votes

    • DR
      Apr, 2012
      Dustin
      Do not forget that if they choose to take you to court within your states statute of limitations you will have to settle the claim before the judgement or get a new 10 year ding on your credit from the date of judgement.
      0 Votes

  • NS
    Aug, 2011
    Nicole
    I had a school loan I haven't paid on in 7 years, today I received a letter from a debt collector. I've grown up now and realize its time to take care of my debts, so I called and set up payments through my debit card. However, tonight I decided to pull my credit report and discovered that the school loan is falling off my credit NEXT MONTH! Can I call my bank and cancel my debit card? Or will they just access my bank account? Or did I just start the 7 year time clock all over again by setting up payments? HELP!
    0 Votes

    • BA
      Aug, 2011
      Bill
      Something appearing on a credit report and whether or not you have a financial liability are separate factors. Most school loans are not subject to the same SOL as other debts and are also not easily included in a bankruptcy. My guess is that setting up payments was not a bad idea.
      0 Votes

    • SC
      Sep, 2011
      Sonya
      Federal school loans never fall off. Private ones do, and unfortunately, if it was a private loan, there is no way to reverse it with all the fees attached to the delinquency. A payment reactivates it to your history. A federal school loan can haunt you over 20 years down the road.
      0 Votes

  • BA
    Dec, 2009
    Bill
    The question of whether it is common practice for the original creditor to sell a bare or fully documented account to a collection agent (or one collection agent to sell a documented account to another) is irrelevant. The real question is, "Does the collection agent who is trying to collect a debt from me have a bare or fully documented account?" Assume the collection agent has an undocumented account. Any debt validation letter sent to a previous collection agent has no effect on the present collection agent. See Collection Agency, Collections Laws & Statute of Limitations for more details.
    0 Votes

  • 35x35
    Dec, 2009
    harlan
    First I would like to say one thing your web site has been very helpful. I have a couple of quick questions Is it normal practice for lenders to sell all records on accounts they close out in a charge off if so is there a limit to imfro that can be sold. Does the letter of validation go from company to company. What if there is no letter or if there is it has no date of last payment on it.
    0 Votes

  • BA
    Feb, 2009
    Bill
    No, you did not restart the process again, you would have done that if you had sent them a partial re-payment. I suggest that you check for your state's Statute of Limitations here: http://www.bills.com/collection-laws/, if you see that the debt is older than your state's statute, then you do not even have to pay the debt back. Keep in mind that the statute clock will start counting from the date of your last payment on the account.
    0 Votes