How to Rebuild a Bad Credit Rating, Part Four
Cash Flow + Credit, Internet Finance, Web Of Loans
Don’t Let the Past Linger
If negative information that is out of date, and can no longer legally be reported, appears on your report, write to the credit bureau to dispute it. The general rule of thumb is that negative information can remain on your credit report for up to seven yearsten in the case of bankruptcy. (Positive or neutral information can remain forever.) The tricky part is determining exactly when that seven-year period starts.
Late Payments can stay on credit reports for seven years from the last schedule payment. If your report lists that a payment was three months late because a payment that was due January 1, 2005, wasn’t made until May 2005, that late payment can remain on your report until January 1, 2012seven years from the date the payment was supposed to have been made.
Unpaid Lawsuits and Judgments by law can be reported for seven years from the date they were entered (by the court) or the governing statute of limitationswhichever is longer. The governing statute of limitations is the time under state or federal law that the courts allow for collecting the judgment. In many states, that period of time can be as long as twenty years or more. Once the judgment is paid or the suit is settled, however, the seven-year limitation for paid lawsuits or judgments takes effect. If you want to find out the governing statute of limitations, check with your attorney or your state attorney general’s office.
In practice, all the major credit agencies remove all judgments after seven yearswhether they are paid or not. The problem is the plaintiff who is owed the money may be able to get a new judgment filed with the court if you haven’t paid within seven years, and that new judgment could go on your credit record.
Paid Lawsuits and Judgments can be reported for seven years from the date they were entered by the court, not the date you paid them.
Unpaid Tax Liens may remain on your credit report until they are paid, although again, all the major credit agencies say they will remove them after seven years.
Paid Tax Liens may remain on your credit report for seven years after they were paid. Again, the credit agencies will remove this type of negative information if it is more than seven years old.
Nontax Liens can be reported for as long as they remain filed against the consumer’s property, or until the applicable statute of limitations expires. (Equifax does not report property tax liens.) Again, credit bureaus will usually remove information after seven years, but there may be ways to get it back on your report.