Length Of Time Information Remains On Credit Reports

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149
http://activerain.com/droplet/58QY

Length Of Time Information Remains On Credit Reports. I regularly try to posts and update blogs with information related to a Borrower ability to obtain financing, and credit information is among the most important I try to keep Borrowers informed with.  I feel strongly about providing credit information, because it is the one thing Borrowers have a significant level of control over in obtaining financing.

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, and also important for Borrowers to know as they monitor their own credit report.  Particularly important is the Length Of Time Information Remains On Credit Reports. 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 and let it come off the credit report on its own.
  • 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 Borrower's 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.  Depending on what the Judgment or Collection is, and length of time it has been reporting on the Borrower's credit report, will determine what I will recommend.  So in talking with the Borrower I will discus the time periods in the chart below, and what order the Judgments, Tax Liens, Credit Cards, or Collections should be paid or not 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 this chart 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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 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, #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 7 times:

Re-Blogged By Re-Blogged At
  1. Debbie Reynolds 12/19/2017 05:00 AM
  2. Roy Kelley 02/25/2018 01:00 AM
  3. Gary Frimann 12/22/2017 03:12 AM
  4. Gita Bantwal 12/22/2017 05:31 AM
  5. Gabe Sanders 12/29/2017 11:50 PM
  6. Joyce Marsh, Daytona Beach Florida 02/25/2018 02:45 AM
  7. Julius Schoenherr 03/02/2018 03:55 AM
Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
Mortgages
1st Time Buyers
Real Estate Rookie
Be The Best In Your Field
Tags:
credit reports

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Rainmaker
1,304,456
Amanda S. Davidson
Amanda Davidson Real Estate Group - Alexandria, VA
Alexandria Virginia Homes For Sale

George, you provide so much information in this post. Thank you. I hope many who are thinking about buying a home read this. Like it or not our credit scores matter in a big way. 

Dec 19, 2017 05:41 AM #13
Rainmaker
4,198,872
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the valuable information, George.  I will save this post for future reference.

Dec 19, 2017 05:41 AM #14
Rainmaker
2,965,392
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning George. This is surely very complicated and a good reason to seek good advice like yours.

Dec 19, 2017 06:15 AM #15
Rainmaker
2,258,428
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The "mark" of Cain has turned into a lucrative business. 

Dec 19, 2017 07:39 AM #16
Ambassador
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Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

You provide such useful information George Souto well deserved Featured

Dec 19, 2017 07:50 AM #17
Rainmaker
1,449,655
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

Good information.  I am delaying with a ate payment on my report now. Letter issued by credit union to me indicating it was their mistake. One bureau still has not corrected.  Will address after Christmas again!

Dec 19, 2017 09:25 AM #18
Rainmaker
481,031
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Great information! Although seven years and ten years seems like forever, time flies and borrowers need to realize the event that hurt their credit will eventually roll off and have no impact.

Dec 19, 2017 10:01 AM #19
Rainmaker
149,024
Corey Martin
Martin Presence Group - Ruston, LA
Real Estate and Management Solutions

This is a great information. Everyone needs to see this table. Thank you for sharing!

Dec 19, 2017 12:32 PM #20
Rainmaker
1,366,044
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Thanks for sharing this George Souto, hope many will have the opportunity to read it. 

Dec 19, 2017 09:07 PM #21
Rainer
318,659
Dwight Puntigan
DRP Realty, LLC - Saint Peters, MO
Dwight Puntigan

The list does not include a short sale.  I have not ever talked to anyone that was going to a bankruptcy lawyer that did not end up in bankruptcy.  We do not think of these time lines and needs for credit or alternatives before we get ourselves into these situations.  Not many consider protecting equity and assets.  Should this be a high school mandatory subject like civics used to be?

Dec 20, 2017 09:43 AM #22
Rainmaker
485,759
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Just talked to a client about when bankruptcies comes off the credit report. Thanks for confirming this.

Dec 20, 2017 10:14 AM #23
Rainmaker
227,712
Shirley Coomer
Keller Williams Realty Sonoran Living - Phoenix, AZ
Realtor, Keller Williams Realty, Phoenix Az

Definitely a post to bookmark.  Buyers often are confused (as are agents) as to how all this information impacts a credit score.  Thanks for sharing valuable information!

Dec 20, 2017 12:10 PM #24
Rainmaker
155,454
Mary Jo Quay
Remax Results - Edina, MN

Last winter I helped a new agent waiting for his license represent a friend in buying a home. The new agent was a former client, quiet, respectful, very Christian. His buddy was approved for up to $1 million.  I trusted that his friend would be of a similar mind, and didn't google him. Only after I had shown over 50 historical landmarks to him, written 4 offers where he argued price and condition to the point where I was more than a little annoyed, did I Google.  Big fat smiling mug shot for fraud, felony, misuse of funds, and 3 years in jail. Apparently, the lender did a 'looks good,' pre approval and wasn't aware that the loan could be denied on the basis of fraud. 

Dec 20, 2017 07:44 PM #25
Rainmaker
522,878
Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

This is great information and worthy of being featured!

Dec 21, 2017 05:26 AM #26
Rainmaker
1,143,917
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Excellent info provided here, George Souto.  I don't think LOs get near enough credit for the advice, time, and assistance they provide consumers.  It can be a long (and sometimes unrewarded) process.  It really takes some hand-holding and effort.  I know your clients are in excellent hands and lucky to have your guidance ...

Gene 

Dec 21, 2017 08:25 AM #27
Rainmaker
3,954,638
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I agree with Gene. Your clients are lucky to be working with you. I will bookmark this post.

Dec 22, 2017 05:26 AM #28
Rainmaker
1,693,085
Patricia Feager
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

George Souto - Keeping us updated is very valuable to me. Thank you! Your knowledge and expertise is very important to me and others too.

May you be blessed for sharing knowledge and being a part of the AR Community. Have a very Happy, healthy, and safe New Year!

Patricia

Dec 29, 2017 01:36 PM #29
Ambassador
2,480,337
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Thanks, George! This is wonderful information to share with those struggling to bring up their credit scores so that they can qualify to purchase a home.

Dec 30, 2017 07:51 AM #30
Rainmaker
691,532
Joyce Marsh, Daytona Beach Florida
Premier Sotheby's International Realty - Daytona Beach, FL
Two Decades Of Experience Selling Luxury Homes...

There seems to be a great deal of confusion in regards to credit history, and credit scores. This is really helpful for those trying to improve their credit. 

Feb 25, 2018 02:47 AM #31
Rainmaker
1,701,202
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Liked and Bookmarked ! FICO needs to be a Mandatory MCE  Course @ License Renewals !

Feb 25, 2018 06:42 AM #32
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