Tower Loan Blog

How Long Does Credit Stay On Your Report And When Does It Fall Off?

You’re hoping to take out a loan but, uh oh, you’ve got a negative credit on your report. Consumers who want to borrow money in the form of a loan or credit card are evaluated based on their individual credit score, or credit rating, which lenders obtain by examining your credit report. But how long does credit stay on your report? And, furthermore, when do things fall off your credit report?

If you have negative reporting that has affected your credit score, you’ll want to understand the answers to these questions in order to get your score back up. Once you have the right information about how credit reporting works, you have a better chance of rebuilding your credit.

What Is Considered Good Credit?

Before we get into the nitty gritty of negative credits, let’s start by examining what is considered to be good credit. Credit reporting scores range from a low of 300 to a high of 850. Within this range, there are categories that rank consumers’ creditworthiness. A score from about 680 and up is considered good credit, but if you want to have excellent credit, you should aim for a score of 740 and up. You can find your credit score on your credit report.

How long is a credit report good for? People with good credit don’t have to worry about that answer (or other questions such as “how long does bad credit last?”) because their reports reflect a history of on-time payments. This means lenders consider them a low credit risk and will be more willing to lend them money, as they’ve proven they can be trusted and that the loan will likely be repaid on time.

How Long Do Things Stay on Your Credit Report?

The answer depends on several factors. There are different types of information on a credit report, and not all types of negative information stay on for the same amount of time.

How long does credit stay on your report?

Credit Cards

If you have a credit card account that you regularly use and regularly pay on time, that is positive credit information that can last on your credit report indefinitely, so long as you continue the positive behavior and keep the account open. On the other hand, when it comes to credit cards, how long can negative credit remain on a report? If you have missed or late payments, that information can stay on your credit report for as long as seven years. After that time, it usually falls off.

Collections Accounts

How long does a collection stay on your credit report? Generally speaking, a collection account will stay on your credit report for seven years from the time the original account went past due. When do collections fall off? The negative information stays on your report even if you pay off the account, so the answer to this is still seven years.

Hard Inquiries

When you apply for a loan or credit and the lender requests to review your credit report as part of the application process, that inquiry is known as a hard inquiry and impacts your credit score. The inquiry stays on your credit report for two years, but only affects your credit score for 12 months.

How Long Can a Negative Stay on a Credit Report?

In terms of a negative, how long does credit stay on your report? In addition to the information provided above about credit cards and collections accounts, other negatives to consider include bankruptcies and foreclosures.

Chapter 7 bankruptcies can remain on your credit report for up to 10 years, while Chapter 13 bankruptcies usually fall off after seven years. Foreclosures also generally fall off after seven years. A short sale, when you sell your home for less than the amount due on the mortgage, is also considered a negative credit event and will appear as such on your credit report. Short sales, which can show up on your credit report as charge-offs or settlements, also usually drop off your credit report after seven years.

How Far Back Does a Credit Report Go?

Given the above information, it’s safe to assume that negative information on your credit report goes back seven to ten years, depending on your individual situation. However, if you maintain open accounts in good standing, that information can remain indefinitely on your credit report.

Work With Tower Loan

At Tower Loan, we understand the complexities of credit reporting and negative credit items. We also know that sometimes life throws an unfortunate circumstance your way that can lead to bad credit, and we believe that shouldn’t prevent you from achieving your financial goals. Let us help you navigate how to apply for and get an online loan to get you back on track to rebuilding your credit score.