How Long Does Debt Stay On Credit Report?

How Long Does Debt Stay On Credit Report?

Having debt on your credit report is not fun, but it is a reality for many people. The good news is that debt does not have to stay on your credit report forever.

On average, debt will stay on your credit report for seven years. However, there are ways to get the debt removed from your credit report sooner.

Read on to learn more about how long debt stays on your credit report and what you can do to get rid of debt faster.

What Is A Credit Report?

A credit report is a record of your financial history. It includes information about your credit cards, loans, and any other debts you have.

Your credit report also includes information about your payment history. lenders use this information to decide whether or not to give you a loan.

Your credit report is important because it can affect your ability to get a loan, rent an apartment, or even get a job. It is also used to determine your credit score.

Read: Cheapest Way To Get Out Of Debt

How Long Does Debt Stay On Credit Report?

The type of loan you have will decide long a debt stays on your credit report. The Fair Credit Reporting Act states that most debts can stay on your credit report for seven to ten years or even longer in some cases.

Here’s a table that shows how long different types of debt can stay on your credit report:

Hard inquiries3 Years
Money owing to the government or guaranteed by it8 Years
Late payments8 Years
Foreclosures8 Years
Short sales8 Years
Accounts collection8 Years
Chapter 13 bankruptcies8 Years
Judgments7 years, or until the state’s limitation period runs out, whichever comes first
Unpaid taxesPermanently, or for a period of seven years after the previous payment.
Unpaid student loans
Permanently, or for a period of seven years after the previous payment.
Chapter 7 bankruptciesPermanently, or for a period of seven years after the previous payment.
Credit inquiries9 Years

Should You Continue Making Payments On Debt That Has Been Removed From Your Report?

Your debt is not just erased when it is removed from your credit reports; rather, the amount you are legally responsible for paying on the debt is reduced to zero.

This is why you might still receive collection calls or letters after your debt has been removed from your credit reports. The collectors are trying to collect on the full amount of the debt, even though it has been discharged.

What Will Happen To Your Credit Score If You Have Derogatory Marks Removed From Your Credit Report?

Most derogatory marks should automatically fall off your credit report after seven years. This includes bankruptcies, foreclosures, and late payments.

However, if you use credit properly, your score may return to its beginning value within five to seven years.

When a negative item on your credit report is more than seven years old, you may reject it with the credit bureau and request that it be removed from your credit report.

Other Options For Improving Your Credit Score

Your credit score doesn’t necessarily have to take a hit when you have debt. There are other options for improving your credit score, such as:

  • Make The Payments On Time.

This is one of the most important things you can do to improve your credit score Payment history is the most important factor in determining your credit score.

If you think you won’t be able to make a payment, contact the lender and explain the situation. Many lenders are willing to work with you to make alternative arrangements.

  • Check Your Credit Scores

Checking your credit scores will help you better understand and track your entire financial situation. Look for mistakes, including inaccurate credit card balances, trade lines that aren’t yours, and accounts that are recorded as overdue wrongly.

  • Consider A Consolidation Loan

A debt consolidation loan combines all of the debts into a single loan with a cheaper interest rate, potentially saving you money.

Since debt consolidation might temporarily harm your credit, a debt consolidation tool can help you decide whether this sort of financing is best for you. Consider a debt relief program from the top accredited debt relief companies if you aren’t able to find resolutions yourself.

Final Thoughts

Debt can stay on your credit report for seven to ten years. However, if you follow the steps above, you can improve your credit score and get rid of debt sooner. 

If you’re struggling with debt, don’t hesitate to seek professional help. A financial advisor can help you create a budget, negotiate with creditors, and find the best solution for your unique situation.

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