Length Of Time Information Remains On A Credit Report

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149
http://actvra.in/4jbt

As a Loan Originator I work with many Borrowers who need to improve their Credit in order to qualify for a mortgage.  There are several factors I need to consider to help a Borrower improve their Credit Scores.  Among the information I need to know in order to help them is the Length Of Time Information Remains On A Credit Report. For example:

  • Judgments always need to be paid in order to qualify for a mortgage, but if a Judgment is close to reporting for 7 years on a Credit Report it may be wise to not pay it.
  • Tax Liens do not have a time limitation for how long they will report on a Credit Report, however, if the Tax Lien is an IRS Tax Lien it does not have to be paid in full if the IRS has granted a payment schedule.
  • Credit Cards will report on a Credit Report for as long as the Credit Card has a balance, and will not come off the Credit Report until the Credit Card has been inactivity for 7 year.
  • Collections work differently than Judgments, Tax Liens, and Credit Cards.  Collections (listed as charged to profit & loss in the chart below) will remain on a Credit report for 7 years, and will have a different impact on a Borrowers Credit Score depending on the length of time the Collection Company has been reporting it.  If the Collection has been reported within the last two years, it needs to be paid for the Credit Score to improve.  If the Collection has not reported for two years or more, it will have a negative impact on the Credit Score if paid and brought current again.

Given the differences in how debts report on a Credit Report and length of time they report, it is important to know what needs to be paid, how much to pay, and how much longer the debt will report for, especially if the Borrower has limited funds. So if a Borrower has several Collections or Judgments they have to pay, and don’t have the money to pay them, or don’t want to pay them if they will be coming off their Credit Report in the near future.  Depending on what the Judgment or Collection is, and length of time the Borrower has had it, we will discus the time periods in the chart below, and what order the Judgments, Tax Liens, Credit Cards, or Collections should be paid.

The best thing is to ALWAYS pay everything off, but when a Borrower can’t pay everything, I have found the chart below to be very helpful in making decisions.  I hope the chart below proves to be useful for those reading this blog as it has been useful for me. 

 

 

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Tammie White 06/21/2014 04:11 PM
Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
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Rainmaker
2,380,445
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

As annoying as it is, I'm glad to have a way to track any suspicious behavior on my card. Those online Christmas purchases can be tricky sometimes.

 

Love and light, 

 

Jun 18, 2014 03:40 PM #16
Rainmaker
241,174
Shanna Day Team Leader (UT & AZ)
Keller Williams SLC (UT) and Keller Williams Realty EV (AZ) - Park City, UT
Keller Williams Realty

I'm always surprised when dealing with people facing bad credit - they don't really act like they care that it will take 7 years (if they are good dobies) to clean up their credit.   I don't know why I'm ever surprised that those you help out of a credit problem end right back in a credit problem about the time you think you can help them buy a home?  What are they thinking?  

Jun 18, 2014 04:55 PM #17
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

George, this is a helpful post for consumers and agents. There are many things that can be reported negatively. Thanks for the advice,

Jun 18, 2014 06:46 PM #18
Rainmaker
2,055,294
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning George. Very valuable information for everyone in the real estate and mortgage business. Unfortunately there is so much bad information out there, but you set everyone straight.

Jun 18, 2014 08:17 PM #19
Rainmaker
566,085
Bob Force (REALTOR®)
Weichert Realtor - New Colony - Mount Airy, MD
The FORCE in Maryland Real Estate

Thank you George.  That helps a lot in explaining thing to prospective buyers,

Jun 18, 2014 09:25 PM #20
Rainmaker
1,776,580
Andrew Mooers
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

If an agent, broker holds a deposit. The deal goes south. The buyer and seller fight over the deposit. It has lawyers going back and forth with poison pen letters, sabre rattling. Over a 500 dollar deposit. Then small claims court judge decides give it to the buyer. So the trust account check is written and we are finally done. Not so fast. Seems the judgement names the real estate agency as the brokerage outfit holding the deposit. Making it a party to the suit. Great. It dings the broker's personal credit report score 100 points because he or she is named in the judgement. That is not right when it is part of our job... trust account holder. Not something we wrecklessly went out and personally caused to warrant a judgement on our perfect credit rating.

Jun 18, 2014 10:00 PM #21
Rainmaker
69,326
Janet Fetterman
Royal Shell Real Estate Inc - Ocala, FL
Selling Luxury Lifestyles...

Thank you for this relevant post and the easy to use chart! It is printing off now for my info/resource binder.

Jun 18, 2014 10:27 PM #22
Rainmaker
2,982,557
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

George, you always put out valuable information to assist everyone, not just buyers!

Jun 18, 2014 10:52 PM #23
Rainmaker
541,064
Maria Gilda Racelis
Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington - Manchester, CT
Home Ownership is w/in Reach. We Make it Happen!

Hi George: This is valuable to each and every consumer. Credit awareness should be instilled more nowadays due to tighter credit restrictions and regulations and for our own education; and for our clients too.

Jun 18, 2014 11:09 PM #24
Rainmaker
1,626,876
Ginny Gorman
Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

George, this is a great reference chart you have put together for all of us on credit information...many thanks!

Jun 18, 2014 11:28 PM #25
Rainmaker
2,127,391
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Yes to this and it follows you around like new born baby chick....Paying cash may off set it

Jun 18, 2014 11:37 PM #26
Rainmaker
1,232,580
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

George, this is good information to know. Judgments and Tax Liens will also hold up transfer of title until they are paid.

Jun 18, 2014 11:39 PM #27
Ambassador
523,887
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Excellent article, George!  This is the type of information that EVERYBODY should be soaking up, whether they are buying a house or not.

Jun 19, 2014 01:18 AM #28
Rainmaker
170,462
Greg Miller
Ruoff Home Mortgage - Sarasota, FL
Florida Home Loans - Conventional,FHA,USDA,VA

Great post George. This very valuable information for those that might have these issues. Thanks for sharing your knowledge.

 

Jun 19, 2014 01:49 AM #29
Rainer
264,329
Linda Metallo DiBenardo
Re/max Impact, Lockport, Illinois - Lockport, IL

7-10 or forever, easy to remember, thanks George.

Jun 19, 2014 06:46 AM #30
Rainmaker
307,377
Randy Mitchelson, APR
iPartnerMedia.com #goipm & Homeland Heroes Home Loans - Estero, FL
First Impressions are made at First Click

Federal student loans never come off a credit report until paid. Uncle Sam never forgets.

Jun 19, 2014 11:02 PM #31
Rainmaker
1,876,635
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

George... this is a fabulous post and I've saved it for future reference. There's a lot of misunderstanding out there on the part of the public as to how long issues affect credit.

Jun 20, 2014 12:22 AM #32
Rainmaker
875,964
Sussie Sutton
UTR Texas Realtors - Pearland, TX
UTR TEXAS Realtors - Rep for buyers and sellers.

This is great information to put in chart form. I am sure many borrowers will find this information useful .

Jun 20, 2014 11:41 AM #33
Ambassador
1,663,471
Tammie White
Franklin Homes Realty LLC - Franklin, TN
www.FranklinHomesRealty.com or (615) 495-0752

I thought items were only suppose to remain for 7 years but I'm almost positive, I have accounts that are decades old still on my credit report.

Jun 21, 2014 04:07 PM #34
Rainer
1,025
Jack Brookner

I thought that tax liens expired in ten years and then were not reported.  Has that changed?

Jun 29, 2014 06:35 AM #35
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