Derogatory items on your credit report,
such as repossession and foreclosure, missed payments, charge-offs, bankruptcy, inquires, closed accounts, etc., are negative information that stays on your credit report for various lengths of time.
Here is some information about how long derogatory items remain on your credit report:
1. Tax Lien
A tax lien is a public record of your federal or state taxes. The government claims against the assets of a business or individual who fails to pay taxes on time. A tax lien can stay on your credit report for 7 years.
2. Foreclosure or Repossession
A foreclosure or repossession is when you fail to make payments on your property that you used to secure a loan and the bank seizes it. The foreclosure will be reported to the credit bureaus and remain on your credit report for 7 years from the date of the first missed payment.
3. Bankruptcy
Bankruptcy is a legal process in which a person or business may seek relief from the debts they cannot pay. The type of bankruptcy you file determines how long it can stay on your credit report. A chapter 13 bankruptcy will remain on your credit report for 7 years, whereas chapter 7, 11, or 12 bankruptcies will stay on your report for 10 years.
4. Collections
If you fail to repay your debts on time, it may get turned over to a third-party collection agency or debt collector. Having an account in collections can negatively impact your credit report for 7 years.
5. Judgment
A judgment is a formal decision made by the court following a lawsuit. Both unpaid and paid civil judgments remain on your credit report for 7 years from the date the lawsuit was filed.
6. Charge-Offs
A bank or creditor may list your account as a charge-off when you have missed payments for 6 months. A charge-off will stay on your credit report for up to 7 years from the date your account was reported as a charge-off to the credit agency.
7. Inquiries
Credit inquiries include soft and hard inquiries. Soft credit inquiries won’t stay on your credit report and affect your score. However, hard credit inquiries will affect your credit score and stay on your report for 2 years.
8. Closed Accounts
A closed account can still affect your credit score if it has derogatory marks such as missed or late payments, collections, and foreclosure. It will stay on your credit report for 10 years from the date the account was closed.
9. Late Payments or Delinquency
If you are 30 days late on a payment, you will be reported as late. Delinquency or late payments will stay on your credit report for 7 years.
You can fix these credit-related issues by making payments on time, keeping your credit utilization ratio under 10%, avoiding back-to-back hard credit checks on your report, and keeping positive accounts open.
