After cleaning up you basic information, checking the reporting status of your various accounts, and checking out the inquiries listed on your credit, you’re ready to move on to Step Five.
Step Five: Getting to Know the Rules of Time and Credit Reporting
At this point it’s time to get a little bit intense and discuss the rules of time and credit reporting. It’s not quite as out of this world as the rules of time and space, but there are moments when it feels just as inexplicable. Knowing when negative items on your credit report can be removed will allow you to create a timeline for reaching your goal of 720.
Items can only remain on your credit report for a specific period of time.
Generally speaking, accounts can stay on your credit report for 7 years from the date of the last activity. Last activity means the date of the last payment or charge. Study your credit report and determine when each account you would like removed will hit this magical 7 year date from last activity so you know exactly when it should be removed. If it’s not removed automatically, you can notify the credit bureaus of the need to remove a trade line once the designated time has passed.
Some Helpful Rules of Time and Credit Reporting to Know:
- Bankruptcy (Chapters 7 and 13) stays on your credit report for ten years. The ten years begins the day you file. Accounts included in the bankruptcy will be noted as being active on that date as well, so the “date of last activity” for accounts included in your bankruptcy is also the date you filed.
- 30-180 delinquency notations can legitimately remain on your credit report for seven years from the date of the first missed payment.
- Collection accounts can remain on your credit report for seven years from the date of the first missed payment leading the account to collections. This is the original delinquency date reported by the original creditor.
- Collection accounts that have been paid in full should be reported as “Paid Collection” on the credit report.
- Charged-off accounts can remain on your credit report for seven years from the date of the first missed payment that led to charge-off (a.k.a. the original delinquency date). This is true even if payments are made later towards the charged-off account balance.
- Closed accounts will continue to report. A closed account in this scenario would be defined as one that is no longer accessible for use. They may or may not have a zero balance. A closed account with delinquent notations remains seven years from the date it was reported closed (regardless if the closure was at the request of the consumer or the creditor). The delinquency notation itself should be removed seven years after the delinquency occurred. Closed accounts with a positive history remain on the report for ten years from the closing date.
- Lost credit card continue to report for two years from the date they were reported lost if there are no delinquencies. Delinquencies that occurred prior to the card being lost continue to report for seven years.
- Judgments report for seven years beginning the date the judgment was filed.
- Tax liens (city, county, state or federal) that go unpaid will report for fifteen years from the filing date. Tax liens that are paid will report for seven years from the date it was paid.
- Inquiries will remain on your credit report for two years. Some inquiries will show as a “personal credit report” pulled by the consumer (i.e. employment or pre-approved offers, etc.)
If you have other questions regarding your bankruptcy or how to restore your credit after bankruptcy, please get in touch with an experienced southern California bankruptcy attorney at Westgate Law today.