Length Of Time Information Remains On Credit Reports

Reblogger Debbie Reynolds
Real Estate Agent with Platinum Properties TN Broker: 208698

If you have ever wondered how long negative credit items stay on your credit report, this post will tell you.

Original content by George Souto NMLS #65149

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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Rainmaker
3,308,204
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Debbie. This is an instance where 7 is not a lucky number. Enjoy  your day!

Dec 19, 2017 05:17 AM #1
Rainmaker
3,139,218
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Excellent reblog, Debbie... so much confusion out there about how long it takes to remove blemishes off of one's credit report.

Dec 19, 2017 05:32 AM #2
Rainmaker
1,523,747
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

Debbie, this is such an informative post. I had missed it and will head over to leave a comment for George after this. Understanding a credit report and how it all works could be a full time job. So many details!

Dec 19, 2017 05:38 AM #3
Rainmaker
401,273
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Debbie, I missed the original post. Thanks for sharing it. I think this is valuable information for those who need to improve their credit. It gives them a look at reality.

Dec 19, 2017 05:39 AM #4
Rainmaker
3,640,441
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Debbie. Very complicated stuff here which is why talking with an expert matters.

Dec 19, 2017 06:14 AM #5
Rainmaker
4,110,991
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Debbie, great reblog, and wondered why a credit card was still on my report long after it was closed.  

Dec 19, 2017 07:05 AM #6
Ambassador
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Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

Thanks Debbie for helping George get this valuable information out so we can help our clients.

Dec 19, 2017 08:31 AM #7
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Interesting advice on judgments. In Oklahoma if you don't renew the judgment after 5 years you can't collect anymore so that was good advice.

Dec 19, 2017 08:59 AM #8
Rainmaker
525,654
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 #9
Rainmaker
2,189,919
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

I think this says you're pretty much hosed if you have horrible credit. Waiting 7 to 10 years is a long time.

Dec 19, 2017 11:13 AM #10
Rainmaker
5,428,807
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much, Debbie, for sharing this excellent reblog selection.

Dec 19, 2017 02:31 PM #11
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Debbie thank you for re-blogging my blog and sharing this information with your readers.

Dec 19, 2017 03:26 PM #12
Rainmaker
2,704,856
Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Debbie Reynolds great choice for a reblog...credit is too important to not get right.  George Souto always has the information mortgage hopefuls need!

Dec 19, 2017 04:59 PM #13
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Debbie Reynolds

Your Dedicated Clarksville TN Real Estate Agent
Clarksville and Real Estate are my specialities! May I help you?
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