How Long Will Collection or Negative Derogatory Information Stay on Your Credit Report?

Credit information can and usually stays on a person’s credit report for 7 years. You can use the information below as a reference to guide yourself and figure out how long derogatory information stays on your credit report

General credit information: 7yrs
Collections: 7yrs from date of last activity
Bankruptcy: 10 yrs
Foreclosure: 10-12 yrs from the date filed
Garnishment: 12 yrs from the date or entry or 7 yrs from the date satisfied
Judgment: 12 yrs from the date or entry or 7 yrs from the date satisfied
Tax lien: 12 yrs from the date or entry or 7 yrs from the date satisfied
Dismissed garnishments, judgments, and tax liens: not reportable

Now that you have this information I’ll give you an example similar to a client. The agent he had worked with before gave him the wrong advice.

Lets assume that you had a collection for $1,000 filed against you in December 1998 and you haven’t paid it. It’s now November 2005, so in a few weeks that collection can come off your credit report. (You will probably have to request all three credit bureaus to take it off your credit report). However, you just applied for a loan today and the loan officer tells you that you need to payoff that debt in order to be approved. Since you have the money to pay it off, you do so. Because the date of last activity is now November 2005, the collection will show on your report until November 2012 – another additional 7 years.

Now let assume that this collection was in June 2005 and you pay it off in November 2005 to obtain the loan, this will reduce your credit score. On the other hand if this collection was in September 2005 and you pay it off in November 2005 to obtain the loan, this will actually increase your score. My point is that a collection account that is less than 6 months old and is paid off will be beneficial but if your collection account is more than 6 months old and is paid off this will be detrimental to your credit score.

You as a consumer can request copies of your credit report from the 3 credit bureaus (although it’s better to get a collective report from all three in one which I can help you with) and dispute information that is incorrect. Incorrect information can be corrected or removed but correct information (good or bad) usually stays on the report for the period allowed. Only the credit grantor (lender/bank) or credit bureau can remove correct information.

If you find incorrect information on your report, contact the credit grantor obtain an explanation, have them corrected and ask them to contact all three credit bureaus and correct that information on your report as well. After this you should also contact all three credit bureaus with another letter including documented proof of the error on your report and ask them to remove this information. The credit bureaus by law have to respond to your letter and request. Depending on your case they might approve or deny your request but they have to respond to your letter. Following are the addresses for all three credit bureaus.

Trans Union
PO Box 4000
Chester, PA 19022
866-887-2673
http://www.transunion.com/

Experian
PO Box 2002
Allen, TX 75013
888-397-3742
http://www.experian.com/

Equifax Credit
PO Box 740241
Atlanta, GA 30374
800-685-1111
http://www.equifax.com/

Comments

10 Responses to “How Long Will Collection or Negative Derogatory Information Stay on Your Credit Report?”

Daniel on August 13th, 2007 8:06 PM

I couldn’t understand some parts of this article ong will collection or other derogatory information stay on your credit report? : My Home is my Investment, but I guess I just need to check some more resources regarding this, because it sounds interesting.
A Homeowner’s guide: Short Sales and preventing Foreclosure Pt3 (Selling your home) : My Home is My Investment on September 17th, 2007 8:05 PM

[...] This is the last option you will ever want to take but if needed it is there. Once you have been through the process of a foreclosure your credit will be so damaged that your possibilities of buying a home one or two years later are almost none existent. The foreclosure will stay on your credit for 12 years from the date filed (see my posting titled “How long will collections or other derogatory information stay on your credit report?“). [...]
Ben on October 7th, 2007 10:12 AM

Nice blog, keep up the great work.
Ben
Here you have the top ten questions about credit reports : My Home is My Investment on October 19th, 2007 11:21 AM

[...] How long do derogatory items stay on my report? Read my previous article; which gives you information about this. Normally positive and negative items stay on your credit [...]
Erase Your Debt and Increase Your FICO Credit Score fast and easy….I DONT THINK SO!! : San Jose-Santa Clara County Real Estate UNCENSORED on October 10th, 2008 1:30 PM

[...] from inquiries, late payments, missed payments, charge-offs, foreclosures, liens, judgments and bankruptcies. “No situation is beyond repair” they claim. And how much does this “wonderful” program [...]
MUHAMMAD R. GAZIANI on November 24th, 2008 4:07 PM

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Ney on November 24th, 2008 10:33 PM

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MUHAMMAD R. GAZIANI on December 4th, 2008 4:00 PM

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Ney on December 4th, 2008 7:02 PM

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Credit Repair After Bankruptcy Or Foreclosure: The Secrets They Don’t Want You To Know : San Jose-Santa Clara County Real Estate UNCENSORED on June 2nd, 2010 7:11 PM

[...] did file for bankruptcy, your home was foreclosed on; those negative accounts are not errors and will stay on your credit report a few years (e.g.: bankruptcy for 10 year, unpaid judgments against you for 7 years or until the statute of [...]