From What Date are Negative Items Removed from Credit Score

The Answer to From What Date are Negative Items Removed From Credit Score

The following is a list of the most common negative items contained in consumer credit reports and will adversely affect your credit score.

• Late payments – Payments made 30 or more days past the due date will remain on your credit report for 7 years from the date your payment became late.
• Chapters 7 and 11 Bankruptcies – 10 years from the date it is discharged.
• Chapter 13 Bankruptcy – According to the Fair Credit Report Act, a Chapter 13 bankruptcy will stay on your credit report for 7 years from the discharge date.
• Paid tax liens – 7 years beginning on the date in which the lien was paid.
• Unpaid tax liens – 15 years to forever.
• Collection accounts –7 years beginning 6 months after the date the account first became delinquent. Meaning, if you missed your first payment in January 1st, this account will appear on your credit report for 7 years beginning 6 months after that January 1st date, in this case the beginning date would be June 1st.
• Civil judgments – 7 years or the statute of limitations for your state, whichever one is longer.
• Charge-Offs – These are treated in the same manner as collection accounts and remain on your credit report for 7 years, beginning 6 months after the first date your account become delinquent.

Negative Items Explained

It is important to understand that negative items are not removed from your credit score; they are removed from your credit report, which affects your credit score. The most common negative items that appear on your credit report are:

• Late payments - Anything that is paid 30 days or more late. This includes your household bill payments.
• Tax liens - If you owe property, federal or state taxes and a lien has been placed against the title of your property, it will be on your credit report.
• Civil judgments - Civil judgments are court actions against you in which a creditor is attempting to collect a debt. Some common types of civil judgments are: child support orders, small claims court cases filed against you and wage garnishments.
• Collection accounts - Whether you are paying or not paying a collection account, it will appear on your credit report. Accounts that have gone to collections but have been paid in full will also appear as negative items.
• Bankruptcies - All chapters of bankruptcies are reported.
• Charge-Offs – Any account that has been deemed "uncollectible" by the creditor and has been subsequently written off as a bad debt.

How Your Credit Score is Determined

Now that the pressing question of from what date are negative items are removed from credit score has been answered, there are a few more things you should know about how credit scoring works.

• 35% of your overall credit sore is determined by your account payment history - Both late payments and on-time payments are included in your account payment history.
• 30% is comprised of the dollar amounts outstanding - How much you owe on each credit account.
• 15% is based on the length of your credit history - The length of time in which your accounts have been open.
• 10% is based on much new credit has been issued to you - How often you are applying for a new line of credit has an affect on your credit score.
• 10% based on the types of credit you use - There are two main types of credit accounts: Revolving lines of credit, like credit cards and installment loans like mortgages and car loans.

A Few Final Words of Caution

• Although the FCRA states that Chapter 13 Bankruptcies are to remain on your credit report for 7 years, they more often than not, remain on your credit report for 10 years. It is up to you to contact Experian, Equifax and Transunion to get a Chapter 13 bankruptcy removed if the 7-year time limit has elapsed.
• Remember, the 7-year date for any form of bankruptcy begins on the date your bankruptcy was discharged not the date you filed a petition for bankruptcy. This means the bankruptcy court entered a judgment in which you were no longer responsible for repaying the debts included in your paperwork and not the date you filed.
• Be aware of "re-aging". If you contact a creditor years after your account first went delinquent, some creditors will use the date of your most recent contact as the date you became delinquent and your 7 years begins from that most recent date. The Federal Trade Commission is urging consumers to petition the credit bureaus to get this recent date changed back to the original date.
• The older a negative item, the less impact it has on your credit score. That is not to say negative items don't affect your credit 6 years down the road, because they do. Creditors are usually more interested in you recent credit behavior.
• Paid off collections are still negative items. There will be a notation that the item has been paid off, but it will remain for 7 years nonetheless.