Overcoming past credit problems can sometimes be a long, tedious process (especially if you are going it alone without professional assistance). However, thankfully there is a strict time limit regarding how long past credit mistakes are allowed to haunt your credit reports. In other words, most negative credit information is not allowed to remain on a consumer's credit report forever.
What Determines When Items Are Removed from Credit Reports?
The Fair Credit Reporting Act (FCRA) provides set-in-stone guidelines to the credit reporting agencies - Equifax, Trans Union, and Experian - which instructs them when an item must be removed from a credit report. That date is known by a couple of different names: the "FCRA compliance date" and/or the "purge date." Depending upon the type of credit item in question, the purge date will be different. However, the credit reporting agencies (CRAs) always rely on the information provided to them from data furnishers - aka your creditors - in order to determine the date when an item should be purged from your credit report. (The exception to this rule is in the case of public records where the credit reporting agencies proactively seek out this information and no "data furnisher" is involved.)
As mentioned above, the time frame for removal varies depending upon the type of credit report item in question. Due to the difference in purge date timelines, the subject of when an item should be removed from a credit report creates a lot of confusion amongst consumers, and even among many professionals as well. Check out this handy guide if you need help determining when an item should be purged from your credit reports.
Inquiries - After a period of 2 years, inquiries are removed from your credit report by the credit reporting agencies (CRAs). The FCRA [15 USC Sec. 1681g] (a)(3)(A) requires that the CRAs maintain a record of employment inquiries for a minimum of 2 years and other inquiries for a period of 1 year. As a policy the CRAs maintain most inquiries, regardless of their purpose, for 2 years.
Charge-Offs - These accounts must be purged from your credit report after 7 years from the date of the charge-off.
Judgments - After 7 years from the filing date a judgment is required to be purged from your credit reports. However, creditors do have the option to try to re-file the judgment and, if the re-filing is granted, the judgment could remain on your credit report for an additional 7 years.
Repossessions and Foreclosures - The purge date for repossessions is 7 years from the date of the original terminal delinquency (when the account became 6 months past due without being brought current again) on the original loan.
Collections - Collection accounts are required to be purged from your credit reports after a period of 7 years from the date of default on the original account. Collection agencies are not legally permitted to tamper with the purge date in any way. This practice is known as "re-aging" and is prohibited under the FCRA.
Released Tax Liens - Tax liens which have been paid and released must be purged from your credit reports after a period of 7 years from the date of release.
Chapter 13 Bankruptcy - The purge date for a chapter 13 bankruptcy is 7 years from the date the bankruptcy is discharged. However, as it can take several years for a repayment plan to be completed, the maximum amount of time a chapter 13 bankruptcy is allowed to remain on a credit report is 10 years from the date of filing, even if 7 years from the date of discharge has not yet passed.
Chapter 7 and 11 Bankruptcies - Chapter 7 and 11 bankruptcies must be purged from your credit report 10 years after the filing date.
Non-Discharged and Dismissed Bankruptcies - These 2 categories of bankruptcies are also required to be purged from your credit reports after 10 years from the filing date has passed.
Federal Student Loans - The FCRA does not govern how long negative student loan account information is allowed to remain on your credit reports. Instead, federal student loan credit reporting is governed by the Higher Education Act. Unpaid federal student loans are not required to be removed from your credit report...EVER.
Unpaid Tax Liens - There is no purge date associated with unpaid tax liens. In other words, unless you pay a tax lien it can remain on your credit reports, damaging your credit scores forever.
Withdrawn Federal Tax Liens - If you have paid a federal tax lien or entered into an arrangement to pay a lien in full then you may be eligible to receive a withdrawal of the lien under the IRS Fresh Start Program. Currently the credit reporting agencies do not report withdrawn tax liens on consumer credit reports so if you dispute a withdrawn lien and include proof of the withdrawal the lien can be removed from your credit reports immediately.
What to Do about Re-Aging
If an account is currently showing up on any of your credit reports which is past its purge date, then you may have been the victim of re-aging. Re-aging occurs when a data furnisher (usually a collection agency) either accidentally or purposely reports an incorrect purge date to the credit reporting agencies. Re-aging can be disputed with the credit reporting agencies directly and it is very helpful if you can provide proof as well.
About the Author: Michelle Black is an author and leading credit expert with over a decade and a half of experience in the credit industry. She specializes in the areas of credit reporting, credit scoring, identity theft, budgeting, and debt eradication. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Twitter and Instagram.