Are credit reports permanent? The consumers who thought that those two late payments on the mortgage from year ago were gone should think again. Credit history is a very important factor that lenders look at to determine if they should lend credit to consumers. The information contained in credit reports is not permanent but every negative piece of information on a credit report has a specified time before it is removed. The good news is that good payment history can help to improve those temporary negative aspects of credit history.
Negative Credit History Issues
The majority of the information contained on an annual credit report stays on for 7 years. Positive information and personal data does not have a set time to remain on a credit report, but consumers want anything positive to remain on their credit history reports as long as possible. Negative credit issues have a set time that they remain on credit reports. The negative records include:
- Credit Report Inquiries – When lenders pull credit reports, the information can remain for up to two years. Inquiries seem harmless but too many can lower a credit score. For those who are straddling between good credit and bad credit, inquiries can make a significant difference.
- Bankruptcy – Some call this the 10-year mistake. Bankruptcy can hurt credit for up to 10 years for a Chapter 7 bankruptcy and up to 7 years for a Chapter 13 bankruptcy. Each record on the credit report that is marked as “included in BK” can remain of a credit report. Lenders generally do not lend to consumers during this time.
- Tax Liens – This negative issue is probably the worst of them all. Tax liens linger on credit reports a very long time after they are paid. A paid tax lien can remain on a credit report for up to 7 years from the time consumers pay off the lien and 15 years or more for unpaid liens. Getting into a sticky credit situation can make a huge difference in getting approved or denies credit.
- Charge-offs – These are the accounts that have not been paid in 120 days (installment loans) or 180 days (revolving debt). Charge-offs cost lenders, and they keep the negative information regarding these accounts on lenders’ credit for up to 7 years.
- Judgments – Once judgments are paid, consumers have to endure the negative information on their credit reports for up to 7 years.
- Collection Accounts – These accounts are the ones that lenders hand over to collection agencies to try to collect the money. 7 years from the time that consumers made the final payment on their original accounts is how long the information remains on the credit report.
- Late Payments – These payments remain on credit reports for up to 7 years from the time the late payment was made.
No, payments history does not remain on credit history reports permanently. Some of the lenders may be willing to negotiate with lenders to remove some of the negative payments histories once the accounts are paid in full or settled. It is always a good idea to contact lenders to find out if this is an option. Lenders can restore their credit history by making payments on time.