How Long Does a Bad Credit Rating Last on a Credit Report?

bad credit timeframe Maintaining a clean credit report will help you secure the most attractive rates for a home loan, new credit card or auto loan. Yet it isn't always easy to keep your credit report clear of negative information. If you've missed a credit card payment or an account went to a collections agency, those negative ratings can adversely affect your credit score. The good news is that a bad credit rating on your credit report doesn't last forever.

How Long Does Information Stay on Your Credit Report?

The Fair Credit Reporting Act is designed to protect consumers when they apply for credit, and ensures that they are being dealt with fairly when approaching a lender. Federal laws mandate that:

Bankruptcy filings are removed from your credit report after 10 years
Reports of collections are removed after seven years
Civil suits, judgments and tax liens are removed after seven years
All other negative reports on your credit report are removed after seven years.

Keep in mind that the federal statute doesn't always outweigh the state statute. Each state may have its own statutes and specific rules about how long certain items such as bankruptcies and civil suits remain on your credit report. It's generally a good idea to check with your state's consumer credit reporting agency for the specific civil codes applicable to your situation.

Keeping a Clean Credit Report

In some cases, a negative credit rating simply doesn't come off your credit report when it should. It's a good idea to check your credit report yourself at least once a year to make sure it's free of any errors and truly reflects your current credit standing. You can receive one free credit report each year from each of the three major credit bureaus -- Experian, Equifax and TransUnion -- by going to www.annualcreditreport.com. If you notice something that shouldn't be on there, you will need to send a dispute letter to the creditor and keep a copy of that letter in your files until the issue is resolved.

Each creditor reports the status of your account to the major credit bureaus every 30 days, so you may need to wait up to two or three months for the cycle to be complete and your credit report to be updated. Be proactive with this so you don't have to worry about disputing accounts when it comes to applying for new credit.

Sabah Karimi