My answer here explains the rules for credit reports and how long certain items can appear on a report, and the rules for removing old items from a credit report. If you find charged-off accounts appearing on your credit report after seven years, you may want to dispute the incorrect listings with the credit bureaus. We describe how to do this below. We begin with a brief look at the federal rules that control the credit bureaus.
Credit Report Rules at a Glance
Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific federal law is 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.
How Debt Collectors Break These Rules
Some creditors, especially debt purchasing firms, will report inaccurate charge-off dates to extend the amount of time an old account appears on your credit report. If you find any inaccurate information, you should dispute the credit report listing with the bureau in question. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.
The 7-year rule only applies to derogatory items, not to accounts that you are keeping current, or which you closed in good standing. As long as an account is not considered derogatory, it can remain on your credit report indefinitely. In fact, even accounts that are no longer reporting to the credit bureaus may continue to appear on your report as long as the account is not a derogatory item. It is common to see positive items that are more than 20 years old appearing on a credit report.
If an account is active and still open, it will remain on your credit report (including the entire history of positive payment history). No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this.
How to Correct Errors on a Credit Report
Following up with the credit bureaus might be a time consuming proposition, depending on how many items you have that need to be removed. To get these items removed from your credit report you have two options:
1. Pay for the services of a credit repair firm. There are many firms that specialize in the area of credit repair. Be careful about the firm that you choose and make sure that it is a reputable firm. You can check with the Better Business Bureau to learn about the performance of a particular company. You need to do proper research on the firm that you will eventually do business with. By law, credit repair organizations must give you a copy of the Consumer Credit File Rights Under State and Federal Law before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. The law contains specific protections for you. For example, a credit repair company cannot:
- Make false claims about their services
- Charge you until they have completed the promised services
- Perform any services until they have your signature on a written contract, and
- Have completed a three-day waiting period.
Your contract must specify:
- The payment terms for services, including their total cost
- A detailed description of the services to be performed
- How long it will take to achieve the results
- Any guarantees they offer
- The company's name and business address
2. Do it yourself. The Federal Trade Commission provides extensive credit-related information and self help resources. You will first need to obtain a copy of your credit report from each of the three credit bureaus. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through AnnualCreditReport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time.
Check your reports for the action items. Keep in mind all the bureaus now have provisions to dispute items online, but in most cases you will need a copy of the respective report and other information to do so. Once you are ready, you can contact each of the three bureaus at the contact information provided below:
|File a credit dispute online at Equifax||File a credit dispute online at Experian||File a credit dispute online at TransUnion|
Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like:
|FTC Sample Letter of Deletion|
Dear Sir or Madam:
I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.
This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.
Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Enclosures: (List what you are enclosing)
Once you resolve the issue with the credit bureaus, tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct, that is, if the information is found to be inaccurate, the information provider may not report it again.
I hope this information helps you Find. Learn & Save.