The Fair Credit Reporting Act includes Statutes of Limitations on how long negative credit can remain on your credit report. Here is a quick list for your reference.
Late Payments: 7 years from the late payment date
Collections, Charge-Offs: A late account becomes a collection or charge-off after it is 180 days past due. It must be removed 7 years after the last date of delinquency.
Chapter 7 Bankruptcy: 10 years from the file date.
Chapter 13 Bankruptcy: 7 years after the file date.
Judgments: These are more complex. They have a Statute of Limitations of 7 years; however, they may be revived at any time by the judgment holder, making them last indefinitely until paid.
Unpaid Tax Lien: Forever, no Statute of Limitations.
Paid Tax Lien: 7 years from the date of release.
Word of Advice: File the release with your courthouse so the 7-year clock starts.
Hot Tip: If an IRS tax lien is less than $25,000 and paid, you can use IRS Form 12277 to have it removed within 90 days.
Heartfelt thanks to Chad Kusner, President of Credit Repair Resources LLC, for this information.
Are you curious about how credit repair specialists and certified credit attorneys legally delete bad credit?
Kate W. wrote to tell me that her credit score increased from 613 to 720 after following the system in Repair Your Credit Like the Pros.
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An investigation by 60 Minutes turned up 20 million significant mistakes on people’s credit reports. (There are 40 million mistakes, if you also count the ones that won’t get you denied for a home or auto loan.)
To put it another way, 1 out of 10 Americans has an error that will lower their score, and therefore potentially block them from getting what they deserve.
Meanwhile, the three major credit bureaus, Experian, TransUnion, and Equifax, privately owned companies, are raking in $1Billion per year. That’s right, they make money by gathering information about you and selling it to lenders, employers, and creditors. Quite a business idea, right?
Since they’re so rich, you’d think the bureaus could hire staff to fix their bloopers. But it doesn’t happen that way. They hire people in third world countries to “review” consumer complaints–and then they don’t give those people any power or authority to fix the errors. So it ends up being nothing more than a joke.
In an interview 60 Minutes conducted with three employees on staff to review consumer complaints, they said they were required to handle 90 disputes per day. 90 disputes! The employees practically rolled their eyes when they said there was no way they could actually do any type of investigation at all with that quota. What’s more, they had no power to fix errors anyway, so what would be the point? They simply assigned a two-digit code to the complaint and fired back a response to the consumer saying the debt was “verified.”
WHAT A LIE! They said on camera that there was no real verification or even an attempt to verify.
Clearly, the credit bureaus are in clear violation of the Fair Credit Reporting Act. The law states they have an obligation to do a “reasonable investigation” within 30 days.
Ohio state Attorney General said, “The industry is a mess. There’s no doubt in my mind they’re breaking the law.”
Three Things You Need to Know
1) The credit report and credit scores you receive online are not the same reports and scores that mortgage lenders receive. What you get is a more generous score called a “consumer score.” If you want your real score, you need to ask your loan officer.
2) If you are denied credit, it is your right, by law, to know exactly why.
3) If you believe there is an error or incomplete information on your credit report, you have the legal right to dispute it.
Insider Information is Available
There is insufficient space on a blog to post all the insider information about how to dispute derogatory credit, but believe me, there is a right way and a wrong way to go about it. That is why I offer an e-book on this topic. To see, please click here.
I believe it is high time for Americans to know what’s going on with their own credit. We deserve the truth, and I thank 60 Minutes for their investigation and expose. Please feel free to share this information via Facebook, Twitter, email, or any other way.