When it comes to negative information on your credit report, it is worth noting that it can only stay on your report for 10 years max in the case of a Chapter 7 Bankruptcy. In any other case, it can only stay on your credit report for every seven years.
That sounds right, right?
The credit bureaus are mandated by the Fair Credit Reporting Act, which forces them to remove negative information on a consumer credit report within the span of seven to ten years. The amount of time that certain information takes to disappear completely depends on that information.
Yes, this seven to ten years holds true for the most part, though there are a few exceptions to that rule. In some cases, there are negative items that might stay on your credit report forever.
A Consumer That Applies For a Salary Job of $75k or More
Whenever a consumer applies for a salary job that pays out $75k or more each year, the employer will have to use the consumer’s credit report during the employment screening process. In this case, a credit bureau is allowed to keep derogatory information on this particular report, even if those events happened more than ten years ago. These include collection accounts and old bankruptcy.
A Consumer That Applies For a $150k or Higher Life Insurance Policy
If you find yourself applying for a $150k or higher insurance policy, then a credit reporting agency is allowed to give the insurance company any negative information that is older than ten years.
A Consumer That Is Applying For Credit More Than $150k
The last case in which derogatory accounts may still show is when a consumer applies for credit that is greater than $150k.
One of the peculiar things about this particular exception is that most mortgages are included. In this case, if you decide to go out today and apply for a mortgage, you will likely fall into this third category.
Should I Stress About Negative Credit Report Items?
At this point, you may feel a bit concerned about derogatory items sitting on your credit report that you felt would disappear any day now. The last thing you want is for these derogatory items to pop up and hurt you in the future.
However, you shouldn’t panic. Under the FCRA, credit bureaus are allowed to use these exceptions, though that does not mean they will. This is especially true if you have good credit standing now.
If you’ve been wanting to potentially boost your credit score, we recommend getting in touch with us here at Boost Credit 101. Our team can give you the proper insights to help you optimize your credit report and get you the right tradelines for your particular situation.
Take a look at some of the other blogs on our site, as we cover a wide range of topics regarding tradelines, credit, and finances. We look forward to helping you take the next step towards your financial goal.