Statutes of Limitations – Part 1
If you are an avid credit tip reader, this tip marks the 50th one distributed, and if you are dying to know more about a specific subject and don’t want to trust the usual complete garbage found on the web, please send in your requests. Why trust our writings? Well, when you see enough credit reports to out stack the Himalayas, have daily communications with the bureaus, and basically all of the creditors out there continuously. Not to mention seeing firsthand the pain and suffering from both the clients and mortgage professionals you end up just knowing exactly what is going on. You certainly don’t need to read someone’s regurgitated opinion online on what they “feel” should be correct.
Simple question, and I bet you don’t get it right. How long does an item stay on a credit report for? The safe answer is “it depends,” but I obviously cannot give you points for that. Most will answer “7 years” and that is just completely wrong. To start with; the typical derogatory account like a charge off, profit & loss, or collection will stay on your report for 7 years FROM the Date of Last Activity or DLA on your credit report. This is a BIG difference than just 7 years because if every 6 years you paid a dollar towards your account you would long die of old age before it ever came off. Additionally, if the account sells to another creditor you also get another 7-year sentence, so the answer “7 years” is just not correct. Even late payments and child support stay on for 7 years until the last scheduled payment, so if you miss a payment on month 1 of a 30-year mortgage you could face 37 years of it reporting late! Judgements are 7 years from the satisfaction timeframe or the starting timeframe, whichever is first. Chapter 7 BK itself is 10 years but the accounts included are 7 years, from the discharge date. Chapter 13 BK is seven years after satisfaction or 10 years from the start whichever is first. Federal and state tax liens have no statute of limitations what so ever until they are satisfied, then its 7 years. Hard inquiries last two years although that’s irrelevant as the damage only lasts one.
By the way, this is what is meant to happen, doesn’t mean everyone is playing by the rules. On the flip side once we discover all the misleading, erroneous, questionable and unverifiable information it generally all comes off immediately, so to hell with those timeframes. Call us anytime at 1-866-595-6313 and don’t forget to mention this tip to receive over half off your set-up costs.