One question that has been on-going for years is how long do negative items appear on credit reports. Many consumers fear that the negative items might affect them for years and that they delay the consumers’ plans to apply for credit or buy for a new car.
Lawsuit or judgment stays on a report for seven years or until the statute of limitations are up. Information on bankruptcy stays for seven but could extend to ten years. Tax liens likewise stay for seven years from the date of its full payment. If liens remain unpaid, the item can stay on the report for fifteen years from the date of filing. Student loan defaults remains on the report for seven years. There are no time limitations for details about a job application with a salary of more than $20,000. For an insurance application, credit or life, of more than $50,000 it also has no time limitation.
These negative marks usually start from the time the consumer was first late on his or her payment. It also begins from the moment the delayed payment went to collection and never from the last moment the consumer made a payment. It should also be noted that Statutes of Limitations are not related with the duration of time a negative mark can stay on credit reports.
Consumers finding these negative items on their reports ask the next question, what do they have to do to remove those items? Most negative items can be removed after the consumer disputes and presents proof of its error or full payment.
Judgments cannot actually be removed except upon the seven year expiration. If a judgment appears on the credit report but the consumer haven’t been in any, consumers can modify the error by reporting to the reporting agency and providing appropriate evidences to prove the mistake. Bankruptcy on the other hand is not impossible to remove. It is disputable and it can be deleted if the credit bureau cannot verify the account. This means that the burden of proof lies on the credit bureau and it is the most difficult negative item that can be deleted from a report.
Tax liens can be removed only after the expiration of the seven years period. But then its removal can also be done within that period. Tax liens can be erased upon payment of the tax due. Within thirty days, the consumer will receive a notification and a certificate copy that the lien was already erased. Defaulted student loan is also difficult to negotiate. The consumer can dispute the mark with an explanation of its inaccuracy. The bureau will contact the ones who made the negative mark and verify it. If not verified, the mark will be removed.
Fair Credit Reporting Act states that any unverifiable mark on the credit report must be removed. This law was passed in light of the possible negative impacts on the future credit and insurance applications of consumers.
