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How Long Do Derogatory Marks Stay on Your Credit Report?

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Derogatory marks, like missed payments or collections, typically stay on your credit reports for seven years, but some may cast their shadow for up to 10 years. These marks can negatively impact your credit score, making it more difficult to be approved for new forms of credit and obtain lower interest rates. Here’s what to expect if you have negative credit events dragging your score down.

Key takeaways
  • Most derogatory marks stay on your credit report for seven years, but Chapter 7 bankruptcy stays on your report for up to 10 years. 
  • No matter how long the activity stays on your report, its effect on your score will lessen over time.
  • What information is factored into your credit score depends on what credit scoring model is used.

Types of derogatory marks

Derogatory marks come in many forms and with varying degrees of severity, but none of them stays on your credit report forever. The Fair Credit Reporting Act dictates how long each type of derogatory remark stays on your credit report, and the general rule is that most derogatory marks stay there for seven years.

Type of derogatory markHow long it remains on your credit report
Hard inquiriesTwo years
Late paymentsSeven years
Charged-off accountsSeven years
Collection accountsSeven years
ForeclosureSeven years
RepossessionSeven years
Debt settlementSeven years
Student loan defaultSeven years
BankruptcyChapter 7: 10 years
Chapter 13: Seven years

1. Hard inquiries: 2 years

Hard credit inquiries occur when a lender requests a copy of your credit report because you’ve applied for credit. These hard inquiries provide lenders with more detailed information than they receive with soft inquiries for preapproval offers. Hard inquiries will appear on your credit report and can impact your credit score. Note that your score will not be affected when you review your own credit report.

Hard inquiries can stay on your report for two years, although they usually stop affecting your credit score after one year. If you’re rate shopping for a home or auto loan and submit multiple applications within a certain period of time — usually 14 to 45 days — they’ll generally be counted as only one hard inquiry.

How to fix it 

If you need new credit accounts, like a loan or credit card, the long-term benefits of borrowing responsibly usually outweigh the risk of a single hard inquiry. That said, having too many new hard inquiries at one time can negatively impact your score.

2. Late payments: 7 years

Payments are considered late if they aren’t made within 30 days of the due date. The later the payment — whether it’s 30, 60 or 90 days late — the greater the impact on your score. And unfortunately, you can’t just get rid of the derogatory mark by closing the account. 

The negative impact of a late payment will be greatest when it’s fresh and strongest for people with high credit scores. In fact, a single missed payment can cause your score to drop by over 150 points if you’re over 90 days late and have good credit. As time passes, the impact to your credit score will decrease, but it’s still good to take action sooner rather than later.

How to fix it

Start by bringing any overdue accounts current. After that, the only defense is a good offense. To keep late payments from hurting your credit, always make your payments on time.

Once seven years have passed from the date of delinquency, check your credit report to be sure the derogatory mark has been removed. If it hasn’t, you can file a dispute with the relevant credit bureau to have the error removed.

3. Charged-off accounts: 7 years

A charged-off account is one that the credit card company or lender writes off as a loss. Your account may be charged off even if you’ve been making payments if those payments are below the monthly minimum. If the debt is charged off and sold to a debt collection agency, you’ll receive two separate derogatory marks: one for the charged-off account and one for the collections activity.

Once your account has reached this point, not even paying the debt in full will get the derogatory markes off your credit report, although it may help reduce the negative impact on your credit scores.

How to fix it

Pay the debt or find a way to settle with the collection agency. While this won’t get rid of the negative marks on your credit report, it may help turn down the heat. It can also help you avoid the risk of being sued over the unpaid debt.

4. Collection accounts: 7 years

Collection accounts are charged-off accounts that the lender has sold to a collections agency. This usually happens after you’ve gone a few months making less than the minimum payment or missing your payments altogether. The debt will remain in collections until you pay it off, you’re sued or the statute of limitations runs out. 

You’re still obligated to pay the debt even if it goes to collections, although you’ll need to make those payments directly to the debt collector.

How to fix it

The best way to fix a collection account is to pay the debt. You may be able to work out a payment plan or settlement with the collection agency. 

Depending on what credit scoring model you’re looking at, your score may still be affected for up to seven years, but it will be listed as a “paid collection,” which can help when your credit report is pulled. When creating your score, some newer credit scoring models, like FICO Score 9 and FICO Score 10, don’t include collections that have been paid.

5. Foreclosure: 7 years

Foreclosure occurs when a lender takes possession of your home after you’ve missed several payments on your mortgage. This stays on your credit report for seven years from the date of your first missed mortgage payment.

A short sale, which happens when the lender allows you to sell your home for less than what you owe, also negatively impacts your credit, but less so than a foreclosure.

How to fix it 

If you’re concerned about possible foreclosure, contact your lender. Many lenders offer hardship options like forbearance or loan modification. If you’ve experienced foreclosure, the best next step is to focus on rebuilding your credit with responsible use and to wait seven years for the derogatory mark to fall off your report.

6. Repossession: 7 years

Car repossession is like foreclosure — if you fall too far behind on your auto loan payments, your lender can seize your vehicle. There’s no legal guideline on how long lenders must wait before repossessing your property, although in the case of vehicles, repossession typically happens after 90 days of missed payments. The lender doesn’t need to give you notice of impending repossession, so it’s important to keep up to date on your debts.

Repossessions stay on your account for seven years from the date of the first missed payment that led to the repossession.

How to fix it

To avoid repossession, you may be able to negotiate with your lender to establish new loan terms or voluntarily surrender your car. Be sure to get any agreements in writing and follow through with the terms you negotiate. Beyond this, the best course of action is to practice healthy financial habits and wait for the seven-year impact to expire.

7. Debt settlement: 7 years

With debt settlement, a lender agrees to accept less than full repayment. This is recorded as a negative item on your credit report because you didn’t pay back everything you owed. Debt settlement will remain on your credit report for seven years from the first missed payment. 

Settled debt is still better than an account that remains past due and in collections, so if you can’t repay a debt in full, it’s often better to settle than to do nothing at all.

How to fix it

While you can’t remove debt settlement from your credit report, you can take steps to rebuild your credit. Focus on keeping up to date on your current payments, paying off any other outstanding debt and keeping your credit utilization rate low.

8. Student loan default: 7 years

When you miss a payment on your student loan, the loan is considered delinquent. After 90 days of missed payments, your lender will report the delinquency to the major credit bureaus. After 270 days of missed payments, federal student loans are considered to be in default. Private student loan rules vary, but it may take fewer missed payments for a private lender to trigger default.

How to fix it

Seek out student loan rehabilitation. Rehabilitation allows you to get your student loan out of default by making a specified number of consecutive, on-time payments as per the rehabilitation agreement you strike with your lender. To begin, contact your lender and start repairing your credit.

9. Bankruptcy: 7-10 years, depending on type

There are several types of bankruptcy, but only two typically affect individual consumers: Chapter 7 and Chapter 13.

In Chapter 7 bankruptcy, also called “liquidation bankruptcy,” you’ll generally have to sell some of your assets to pay the debt. Chapter 7 will remain on your credit report for up to 10 years from the date you filed, although the impact lessens with time. A bankruptcy filed one year ago will have a stronger impact than one that’s four years old.

In Chapter 13 bankruptcy, you usually get to keep your assets and instead set up a three- to five-year repayment plan. This form of bankruptcy is generally referred to as the “wage earner’s plan” because it’s designed for people who have regular income and can commit to a structured payment plan. Chapter 13 bankruptcies stay on your credit report for up to seven years.

How to fix it 

Bankruptcy cannot be removed from your credit report, so you’ll have to wait until enough time has passed for the derogatory mark to be removed.

As soon as you’re able, begin rebuilding your credit with responsible use. Wait to apply for new credit while you’re working through your Chapter 13 payment plan, but once your bankruptcy has been discharged, you can apply for personal loans and credit cards. It’s a good idea to talk with a financial counselor to discuss if taking on new debt is a good idea.

How to dispute inaccurate information

Mistakes can happen, even on credit reports. The good news is that you can have inaccurate information removed from your credit report, which is why it’s important to check your credit report regularly. Start by requesting free copies of your credit reports from AnnualCreditReport.com.

If you identify a mistake on your credit report, it’s important to address it right away to prevent it from negatively impacting your credit score. To file a dispute, you’ll need to contact the credit bureaus directly online, by phone or by mail. Read our guide for an in-depth explanation of how to dispute inaccurate information on your credit report.

How much does a derogatory mark affect your credit score?

The degree to which a negative credit event affects your score depends on the type of derogatory mark. A hard inquiry may drop your credit score by five points or less, while a payment that’s 90 days late can cost you over 150 points — though the impact may be less if your credit score is lower to begin with. More severe negative items like bankruptcy can drop your score by even more.

How much a derogatory mark affects your credit score will also depend on what your score was to begin with. Negative items generally have a greater impact on higher scores than lower ones. For example, if your credit score is 680, bankruptcy could drop it by 130 to 150 points. Meanwhile, someone with a 780 credit score could lose over 200 points, and someone with a score under 500 may only lose a fraction of that.

How to rebuild your credit score after a derogatory mark

The best way to improve your credit score after a derogatory mark is to focus on responsible credit usage going forward. 

  • Pay your bills and debts on time.
  • Aim to keep your credit utilization ratio below 30%.
  • Limit the number of hard inquiries on your credit report.

Good behavior won’t remove a derogatory mark from your credit report, but focusing on what you can control by practicing healthy financial habits can go a long way toward reducing the negative impact of derogatory marks.

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