How Long Does Information Stay on Your Credit Report?
Credit, credit score, and credit report are terms that are used often and sometimes interchangeably. They are not the same things. It is important that you learn about your credit score in order to empower yourself and take control.
How Long Does Information Stay on Credit Report?
Your credit score and credit report can impact your ability to get credit. The sooner you gain control of it, the better position you will be in financially. You should continue reading to find out more information about these three things and how they can impact your every day life.
What Is a Credit Report?
Your credit report is a document that holds important information about you and your credit usage. Lenders use a credit report to determine how creditworthy you are. Any time anyone is considering lending you money, they will pull your credit report. It contains your credit score, personal information about yourself, including your name and address, and a history of your credit.
Your credit history includes current debts that you have, your payment history, and defaults you have had.
If you have filed bankruptcy, that appears on your credit report for a set period of time.
Your credit report also shows the status of your current loans and if you are in good standing.
It shows information about loans, credit cards, and other bills you may not think about, such as your mobile phone bill.
Your credit report outlines your entire credit history and gives lenders an idea of how risky you are to them. Lenders will deny you credit because of what they see on your credit report. It is important to know how long do things stay on your credit report.
How Long Does Good Information Remain on Your Credit Report?
When you are thinking about how long do things stay on your credit report, it is important to know that there is good and bad information on your credit report. Each of these types of items stay on your credit report for different amounts of time. There is a federal law that determines how long information stays on your credit report.
The Fair Credit Reporting Act (FCRA) is the statue that determines your rights as it applies to your credit report. This law is intended to protect you and your credit report. This is what determines how long information can be kept on your credit report.
There is no requirement for positive information to be removed from your credit report.
This means even after you have paid off a loan or credit card and the account is closed, it can stay on your credit report for as long as ten years. These closed accounts are considered when your credit score is calculated. If it is positive information, it should not have negative implications on your credit score.
How Long Does Bad Information Remain on Your Credit Report?
FCRA also defines how long negative information stays on your credit report. When understanding how long do things stay on your credit report, this probably feels like it is more important to know.
The good news is all negative information must come off your credit report at some point.
No two pieces of negative data are treated the same way. There are different timelines for everything:
Late Payments
Late payments often stay on your credit report for as much as seven years from the date of the late payment. This includes anything that was late. It does not matter if it was 30 days late or more than 180 days late; if it was reported as a late payment, it could stay for up to seven years. Even something that may seem innocent to you, like forgetting to pay a bill one month, can show up as a negative on your credit report. Lenders can choose when they report a late payment. Some report it immediately as soon as your payment is late. Others will give you six months before they report a late payment.
Settlements
Charge offs, collections, foreclosure, repossession, or any other type of settlement can stay on your credit report up to but no longer than seven years from the original date the account was delinquent.
Bankruptcy
Bankruptcy may stay on your credit report for as long as ten years. Some credit bureaus may remove them in seven years, but legally, they can stay on for up to 10.
How to Remove Negative Information?
You should take advantage of this right and review your credit report from every credit bureau. When you look at your report, you are looking for items that are listed on your report in error or that should no longer be on your report.
Dispute
If there is an incorrect item on your credit report, you can file a dispute to have it removed. You have to file the dispute directly with the credit bureau that has the wrong information. It could be one of them or all three. They have phone numbers you can call to file a dispute. You may even be able to file a dispute online.
What Is an Inquiry on Your Credit Report?
Inquiries on your credit report do not easily fall into a good or bad category.
They could have a negative impact to your credit. It may have no impact to your credit. Even if they are a negative hit to your credit, it does not mean that you have mismanaged your credit.
It also does not mean that you did not pay the lender on time. An inquiry does not mean that it will decrease your credit score.
An inquiry indicates that a lender has accessed your credit report. It could be another third party that has accessed your credit.
An inquiry remains on your credit report for as many as two years.
An inquiry can be a hard pull or a soft pull to your credit report.
Soft Inquiry
Hard Inquiry
A soft inquiry is when you or someone else looks at your credit report for a purpose that is not related to the lender. A credit card pre-approval is an example of someone doing a soft inquiry of your credit report. A soft type of inquiry does not impact your credit score.
A hard inquiry is one that occurs as a result of you applying for some type of credit or debt. Anyone that looks at your credit report can see these types of inquires. If you have too many of these types of inquires, it can negatively impact your credit score and lower it.
How Can I Improve My Credit Score?
It is possible to improve your credit score, but it takes work and determination.
You want to make sure that you pay all of your bills on time and for the proper amount. A late payment can lower your credit score.
When it comes to credit cards, you must pay at least the minimum payment each month. You should try to pay your credit card balance in full each month, but if you cannot, you should pay at least the minimum payment.
You want to pay off as much of your debt as possible. Your credit score may be lowered if you have too much debt. Your debt to income ratio can negatively impact your credit score. If you have too much debt as compared to your income, your credit score is lowered. You must pay attention to how much debt you have at any given time. Too much debt can also negatively impact your credit score.
Will a Budget Help?
In general, a budget is going to help you improve your financial health and wellness. You should always have a budget, so you know how much money you have coming in and how much money you are spending. In addition to a budget helping you with your everyday spending, a budget can help you improve your credit score. If you want to focus on paying off your debt, you need a budget to help you get there.
First, you have to know how much money you have to spend each month.
You also need to understand how you are currently spending your money.
Then you determine all of the areas where you can save money.
Most of the time, you are spending money in places without even realizing it. Usually, you are spending money on eating out or daily coffee. If you cut out this spending, you can save a good amount of money. That is money you can put towards paying off your debt faster. Once you remove all of your unnecessary spending, you can determine how much money you have to pay towards your debts.
Then you decide which bills you want to pay and in what order. You can choose to pay off the bill that is the largest or has the highest interest rate. When you pay off your debt quickly you can pay off your debt quicker and improve your credit score.
Where Can I Find Help?
You may find it confusing to understand all the ways your credit is impacted by positive and negative information. There are many resources that can help you navigate your way to an improved credit score. The Goalry Mall has many resources to help you pull your credit report and review it. We will help you understand every line on your credit report. Goalry will help you get your credit report online and view credit report. With this understanding, you can understand your credit score and learn how to improve it. We can help you create a budget and work towards paying off your debts faster.
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Conclusion
There is a lot of information on your credit report. Some of it may be positive, while some of it may be negative. It is essential to know what information is reported and what it means to your credit score. When you have this information, you are better able to help improve your credit score, which ultimately improves your life.
When you have a higher credit score, you are able to get better interest rates on loans and credit cards. You will be surprised at the numerous ways that your credit score impacts many aspects of your life. The bottom line is the most positive information you have on your credit score means the better your credit score will be.