Time Heals Some Wounds
Some things get better with age. This may apply to your credit. If you have negative items in your credit history, there's probably nothing you can do to remove them. Don't worry though, these items cannot haunt you forever. Over time they will fall off your credit reports, and they will not be used in credit scores.
Seven Years of Bad Luck
Breaking a mirror will get you seven years of bad luck. Oddly enough, you get the same thing for making serious mistakes with your credit. You can beg and plead, and you might get lucky, but negative information will generally appear on your credit reports for seven years, including:
Late payments
Chargeoffs
Accounts in collection
Missed payments
Chapter 13 bankruptcy
Note that a Chapter 7 bankruptcy will appear on your credit reports, and lower your credit scores, for ten years. Chapter 7 hurts creditors more, so it lasts longer.
All of those juicy details about you don't just disappear. Your successes and failures are kept in databases by the major consumer-reporting companies. However, these companies are restricted from reporting the negative items after seven or ten years. The Fair Credit Reporting Act limits how and when these companies can report on you.
Exceptions to the Rule
While you have some protection under the Fair Credit Reporting Act, there are exceptions. Tax debts, for example, will not go away unless you pay them off. The government wrote the law, so they get to make the rules. After you pay off a tax debt, the delinquency will appear on your credit reports for seven more years. Another exception to the rule involves highdollar transactions. You can find more detail in the chapter about the Anatomy of a Credit Report.
You should examine your credit reports to see if there is any outdated negative information. Somebody may have incorrectly reported the date on one of your accounts, whether by accident or on purpose. If the account is too old, write a letter and get the information removed.
Myth of the Disappearing Act
A widely spread myth is that you can pay someone to remove items from your credit reports. Of course, the goal would be to remove negative items that are lowering your credit scores. Shady credit-repair companies often claim that they can do this. Unless the negative items are errors, they are promising more than they can legally deliver. If anybody makes promises to the contrary, it's a sure sign that you are dealing with a scam artist.
