Every transaction we make with money typically has a negative or positive impact on our credit report. And properly managing your credit history is an important part of being financially responsible.
But what happens if you fail to pay a bill on time? How long does bad credit stay on your credit report?
The exact answer depends on the type of negative information. Most negative items will show up in your credit history for about seven years from the last date of activity on that account.
But if you’re looking for a more specific breakdown of how long the most common bad credit items remain in your credit file, here’s what you need to know.
How Long Does Bad Credit Stay on Your Credit Report?
Credit accounts: 7 years
Any negative credit activity will remain on your credit report for at least seven years. This includes activities such as applying for new accounts too quickly or making payments late.
And if you close an account, it will typically remain on your credit report for ten years before dropping off.
The good news though is that positive information can stay on your credit report indefinitely.
Late payments: 7-10 years
Speaking of late payments, these can be reflected in your credit history seven to 10 years from the initial date that the account was due.
Late payments for revolving debt, such as a credit card, can remain on your credit file for seven years.
And late payments for installment debt, like an auto loan, can remain on your report for ten years from the date of last activity.
Likewise, a late payment that is 30 or 60 days overdue is going to have less of an impact on your credit score versus a late payment that is 90 days past due. So the sooner you can pay off that late payment the better.
Bankruptcy: 7-10 years
There are multiple types of bankruptcies that individuals can file. And each of them has various timelines for how long they will show up on a credit report.
Chapter 7, 11, and 12 bankruptcy remain on your credit file for ten years after the filing date. Whereas Chapter 13 bankruptcy is typically removed from an individual’s credit report after seven years. However, it may show up for an additional three years after that time.
Foreclosures: 7 years
A foreclosure can be a pretty negative spot on your credit report for seven years. While it won’t ruin your credit history, it will have a negative impact.
The good news though is that the bad credit effect lessens over time. In fact, according to MyFico.com, if you keep all other accounts in good standing, aside from the foreclosure, your credit score can bounce back in as little as two years.
Collection accounts: 7 years
When an account remains unpaid for more than 180 days it will be turned over to a collection agency for further pursuit of payment. This includes credit accounts, unpaid medical bills, and even auto repossessions.
You might be wondering how long do collections stay on your credit report?
The negative information on a collections account should fall off your credit report after seven years. And, 180 days after the account was first reported to the original creditor.
Once you’ve paid the collection balance, the status of your credit history will be reported as “Paid Collection.” It will also remain on your account for the next seven years.
Credit inquiries: 1-2 years
There are two types of credit inquiries that occur when you apply for new credit: hard inquiries and soft inquiries.
Hard credit inquiries usually occur when a lender reviews your file in an effort to loan you funds. Or, when you open a new credit card with them. The lender will pull your credit report and place a “hard inquiry” on it to receive all of your information as part of the lending process.
A hard inquiry is populated from accounts such as mortgages, auto loans, credit cards, and personal loans. What’s more, a hard inquiry usually remains on your credit file for two years. And, only the first twelve months create the most negative impact.
A soft inquiry, on the other hand, occurs during the process of being pre-approved for a loan or credit card. Or, when someone performs a background check on your credit. This kind of inquiry does not affect your credit score and has no impact.
Public records: 7 years
Other public records, such as court judgments or tax liens against your property, can remain on your credit report for up to seven years.
In some cases, they can even show up for an indefinite amount of time. Unless you put in a request for them to be removed.
Where do you go from here?
Have you checked your credit report recently? If not, you could have bad credit items that are negatively impacting your score.
But if you do, don’t despair. There are steps you can take to eventually improve your credit standing. Your first step is to look at the negative items that are dragging down your credit score and the impact they have on your credit file.
This is why it’s important to regularly check your credit report and make note of any inaccuracies or errors. Then, do what you can to improve your credit by always making payments on time and properly managing your money.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|