Time Heals All Wounds
As we’ve mentioned before, the passing of time will erase some of the
black marks on a credit report.
If you have declared bankruptcy, after 10 years, it will disappear from your
credit report. And many mortgage lenders will overlook a bankruptcy when making
lending decisions after seven years.
Seven years is also the magic time period for late payments and charge-offs
to disappear from your credit history.
However, according to the Federal Trade Commission (FTC), there are certain
exceptions:
- Credit information reported in response to an application for a job with
a salary of more than $75,000 has no time limit.
- Information about criminal convictions has no time limit.
- Credit information reported because of an application for more than $150,000
worth of credit or life insurance has no time limit.
- Default information concerning U.S. Government insured or guaranteed
student loans can be reported for seven years after certain guarantor actions.
- Information about a lawsuit or an unpaid judgment against you can be
reported for seven years or until the statute of limitations runs out, whichever
is longer.
The seven-year clock starts ticking the date the “event” took
place, whether the event is a late payment or your account being turned over
to a collections agency.
So, let’s say you were late on a payment in March, but then you caught
up in April. The report of a late payment can remain on your credit history
until seven years from that fateful March.
Next: Alternatives
to Waiting |
