Bad Credit Time Limits - Credit Reporting

The big question for those with bad credit is the question of time limits - how long derogatory credit records will stay on credit report. Even if your credit score recovered somewhat and this can happen within 12 - 18 months following bankruptcy or even foreclosure, the mere present of these records on your credit report may affect your borrowing ability and terms. Note that these bad credit time limits belong to credit reporting. The others are related to debt collection.

Federal Fair Credit Reporting Act sets time limits for records that appear on consumer credit reports.

Making payments on bad debts does not change the credit reporting time limits, except when it comes to tax liens and federal student loans. All other bad credit records should expire on schedule, based on the original dates, regardless of when or whether they are paid. The starting date is always an original delinquency date - see FCRA section 605 (c) (1).

• Inquiries - 2 years.
• Late Payments - 7 years from the month in which the late payment was due. If there are multiple late payments in one account item, then they will each expire individually.
• Charge-Offs - 7 years. The time runs from the date of the delinquency, plus 180 days. If payment was due on January 1, 2000, but debtor defaulted, and never caught up to become current again, and the account is declared a charge-off by creditor, then the seven year reporting time limit starts running on July 1, 2000, with the record scheduled to expire from credit reports on July 1, 2007. More  information on charge-offs is here.
• Collection Accounts - 7 years. The running of this time limit is the same as with charge-offs. The date of delinquency still refers to original delinquency with original creditor, regardless of when collection agency was given or bought the debt. Collection agencies cannot legitimately reset the clock.
• Lawsuits And Judgments - 7 years or until the governing statute of limitations has expired, whichever is longer.
• Chapter 7 Bankruptcy - 10 years from the date of filing or the date of bankruptcy decree.
• Chapter 13 Bankruptcy - 7 years from date paid in full and 10 years if not paid as agreed.
• Foreclosure - 7 years from the date of foreclosure.
• Paid Tax Liens - 7 years from the date of payment.
• Unpaid Tax Liens - forever, unless paid.
• Unpaid Federal Student Loans - forever, unless paid, after which they can appear for 7 years.

The above time limits are for credit reports which creditors see with virtually all credit applications. However, the credit bureaus can legally disclose older information if:

• you apply for a loan of $150,000 or more.
• you apply for life insurance policy with a payout of $150,000 or more.
• you apply for a job that $75,000 per year or more.