Major Credit Bureaus – Learn the Cold Hard Facts about Reporting
A frequent concern of individuals is “how long will a negative listing remain on my credit report?” The answer is seven years. With a bankruptcy or judgment it can stay on your report for up to ten years.
Most people feel like this is an undeserved prison sentence they have been given. During this time they can not move into a house or purchase a new car at a reasonable interest rate.
Seven years – why?
Is a one time mistake with your credit really worthy of a seven year punishment? Why should you have to pay the outrageous cost of having a bad credit report, especially when it was just a brief time in your life? Do all the months of paying on time not count for anything?
Why is seven years the magical number? Has it been discovered that people will not make mistakes or run into financial hardship after seven years?
Of course not, there is no good reason whatsoever for the seven year reporting law. It is a completely arbitrary time limit.
Did you know that before the Fair Credit Reporting Act the credit bureaus had no time limit to how long a negative mark could remain on your credit report? In reality a negative mark remained on your credit report forever.
Congress established the seven year maximum for the credit bureaus. However this is only the maximum, you can often have a mark removed before the seven years have slowly ticked away.
In other words, it is illegal for a credit bureau to report bad credit for more than seven years. Of course, there are many occasions where people rid themselves of negative items long before seven years.
Reporting to the credit bureaus is completely voluntary. Creditors and collection agencies are not required to report any notations or accounts to the bureaus. As well they often remove notations and accounts long before seven years.
Creditors and collection agencies usually just need a little encouragement from a compelling dispute letter or a good credit repair attorney. Plus, the credit bureaus perform credit repair on your report at the seven year mark.
In a utopian society there would be no time limits on credit reporting. Instead, marks would remain as long as they truly reflected the applicant. Information found on a credit report would only provide accurate marks about the applicants’ credit worthiness. Instead of being an excuse for a creditor to give you unreasonable interest rate or down payment.
The point is since we don’t live in that world, why should we wait to repair our credit? Why shouldn’t we take steps today to erase questionable and misleading information from our credit report? This way we don’t have to pay the high cost of bad credit longer than we have to?
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