How Long Does Information Remain On A Credit Report?

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

A question I am often asked by Borrowers who have negative items reporting on their Credit Report is How Long Does Information Remain On A Credit Report?  How long information remains on a Credit Report is a major concern for Borrowers with credit issues, because some of the items on the Credit Report are beyond their ability to correct.  In those situations the Borrower will need to wait until the item is no longer being reported on their Credit Report before they can qualify for a mortgage.

The three negative items which tend to show up the most on Credit Reports are:

  • Judgments
  • Collections
  • Late Payments

Borrowers can't do anything about past late payments, and all they can do is to make sure they do not go late again.  Judgments and Collections are another issue, because they can pay them off so they will stop having a negative impact on their Credit Score.  However, some of the Judgments and Collections I see on Credit Reports for Borrowers with major credit issues are substantial.  It is not unusual for these Borrowers to have a combination of Judgments and Collections upward of $10,000 to $20,000.

An example of a sizable Collection would be a repossessed car.  Even though the car will be re-sold by the creditor, the creditor will still list the full remaining balance as the Collection amount.  The remaining balance on a repossessed car can easily be over $10,000.  When a Borrower has a Collection this substantial, it is not unusual for them to also have several other Collections as well.  Even if the Collection Company is willing to settle for 50% of the amount owned, they will most of the time not settle unless the Borrower is able to pay them the agreed upon amount in one lump sum.  If the Collection is substantial most Borrowers do not have enough funds to do that.

Another reason why Borrowers ask How Long Does Information Remain On A Credit Report? is because they do not want to payoff the Judgment or Collection if they are close to the time which they will drop-off the Credit Report without payment.  Depending on what the Judgment or Collection is, and length of time they have had it, we will discus the time periods in the chart below.

The best thing to do is to just pay everything off, but when Borrowers do not have sufficient funds to do so, the above chart is very useful in determining what Judgments or Collections should be paid-off first, and which ones are close enough to coming off on their own which should either be paid last or not at all.  I am a firm believer if you own a debt, then you need to pay the debt.  So I do not ever suggest a Borrower not payoff their Collections or Judgments on their Credit Report, not paying them will be a decision they need to reach on their own.  However, I do have an obligation to provide the information in the above chart when it is requested by a Borrower who wants to know How Long Does Information Remain On A Credit Report?

My next blog will be on how a Borrower can remove a Judgment, Collection, or Late Payment that is being reported incorrectly on their Credit Report.

 

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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,# Chester,# Deep River, and# Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & #FL and can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

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Re-Blogged 8 times:

Re-Blogged By Re-Blogged At
  1. Nina Hollander 08/17/2013 09:17 PM
  2. Wayne and Jean Marie Zuhl 08/17/2013 11:43 PM
  3. Terrie Leighton 08/18/2013 08:56 AM
  4. Paddy Deighan JD PhD 08/18/2013 08:58 AM
  5. Michelle Carr Crowe,Altas Just Call...408-252-8900! 08/18/2013 12:06 PM
  6. Praful Thakkar 08/18/2013 03:38 PM
  7. Pamela Seley 08/18/2013 04:47 PM
  8. Joni Bailey 08/25/2013 01:52 PM
Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
Realtors®
Mortgages
1st Time Buyers
Real Estate Rookie
Tags:
credit reports

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Rainmaker
231,849
Helen and Larry Prier- Re-Max Gateway - Residential Real Estate
RE-MAX Gateway- Residential Real Estate Sales - Anacortes, WA
Anacortes & surrounding Skagit & Island Counties

george, This is great information. Do you have anything in there about Foreclosures or is that considered a judgement or suit??

Aug 18, 2013 03:14 AM #26
Rainmaker
647,582
Team Honeycutt
Allen Tate - Concord, NC

Thanks for giving us the good information. It will be helpful to know the facts when I am asked about this type of thing.

Betty

Aug 18, 2013 03:39 AM #27
Rainmaker
256,286
Susan Jackson
America's Network Realty Group, Inc - Sandy Springs, GA

 

Thanks for the chart.  I have bookmarked this post, so I can refer to it.

Aug 18, 2013 04:37 AM #28
Rainer
54,333
Debra Hight
Coldwell Banker United, Realtors - Houston, TX
Debra Hight

George, great information, and Bill good add-on.  Thanks to both.

Aug 18, 2013 05:07 AM #29
Rainmaker
1,070,075
Gary Frimann, CRS, GRI
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

George good info-- as always!  I hope you include in your next post that judgements can be renewed for another 10 years.  Very important.  

Aug 18, 2013 06:31 AM #30
Ambassador
458,943
Terrie Leighton
Ferrari-Lund Real Estate - Reno, NV
Reno Real Estate Agent ~ Selling Homes in Reno

A great post because we all get asked asked, and wonder ourselves, about our credit reports! How to get that score back up there is important to most of us. Thanks for the clear explanation about how long information remains on the report.

Aug 18, 2013 08:27 AM #31
Rainer
295,383
Paddy Deighan JD PhD
TimeshareLawyers.pro - Vail, CO
Paddy Deighan J.D. Ph.D

removing judgments can be a headache....I ahvea  client that has submitted a Warrant in Satisfaction 7 times and the county docketing clerk verifies that the credit bureaus has not sent anyone in to verify .....yet the officialk response is that the judgment has been verified!!!

Aug 18, 2013 08:55 AM #32
Rainmaker
1,964,191
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

George,

I consistently learn a lot from you. Thank you very much!

This post was very helpful to me and to others too!

You deserved this feature!!!

Aug 18, 2013 11:19 AM #33
Rainmaker
533,751
Brian Sharkey
SharkeyRE LLC - Port St Lucie, FL
SharkeyRE - #SouthFloridaBroker

George, Thanks again for another wonderful useful post.  Thanks for sharing.

Aug 18, 2013 12:03 PM #34
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Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (800) 591-6121

I agree that if you own the debt, then you need to take responsibility and pay that debt, even if it takes a long time to do so. Thanks for the informative post.

Aug 18, 2013 01:48 PM #35
Ambassador
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

George, excellent post - as always. One thing I have learned hard way - you cannot fight giants, you better off settle it, sooner the better.

Aug 18, 2013 03:36 PM #36
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

George - excellent post and a terrific addition in Bill's comment. As usual, the devil is inn the details :)

Aug 18, 2013 03:40 PM #37
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Excellent post for consumers and agents to know. The best is probably not get to the point of negative reportings to begin with. A home buyer should consult with a loan officer before paying off debts if they are planning to buy a home. I've been told paying them off early can negatively affect credit score and ability to get a mortgage loan.

Aug 18, 2013 04:20 PM #38
Rainmaker
1,478,656
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

It is so easy to spend when you pay by a credit card....but those little plastic cards can bring a lot of trouble...

Aug 18, 2013 04:24 PM #39
Rainmaker
1,013,443
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

This is always important to keep in mind.  A large segment of the population does not know.

Aug 19, 2013 01:36 AM #40
Rainmaker
797,359
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

This is great information to have at hand, especially when you have clients who may be credit challenged.  I had heard that although these items stay on your credit report for a certain period of time, some of them only impact your credit score for a few years, and people can purchase homes even if these items are still being reported.

Aug 19, 2013 08:14 AM #41
Rainmaker
1,057,502
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

George, what would we do without all you valuable information?  This information will help many people who have credit issues.

Aug 19, 2013 12:57 PM #42
Rainmaker
1,311,135
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, I get these questions as well...as a matter of fact I've actually used one of the charts that you've posted in the past to help answer the questions...don't think I ever thanked you for that...thanks!

Aug 20, 2013 08:47 AM #43
Rainer
237,488
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

This should be a hand out for potential borrowers so they can understand how decisions they make about their finances affect their ability to borrow and buy.

Aug 20, 2013 09:23 AM #44
Rainer
1,225
Nelly Lopez
West Green & Associates - Port Chester, NY

This is very useful information.  But I have a question according to people that do credit repairs you can pay to get all the collections and delinquent accounts deleted from you credit report, which would allow you to reestablish your credit.  I don't know if that is the case with judgements and bankruptcies but that is what I have been told in regards to collection and delinquent accounts.  Is that true?

Aug 21, 2013 02:42 PM #45
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