How Long Does Bad Credit Last?

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• November 10, 2014

No matter how you look at it, going through bankruptcy, foreclosure, or debt collection is difficult. This is especially true if your goal is to eventually own your own home. However, a hit to your credit isn’t a scarlet letter that you’ll have to wear for life. It just takes some time and a bit of effort.

Most negative credit information stays on your credit report for up to 7 years, while bankruptcy can remain on it for up to 10. Depending on what the tradeline is, it can be removed even sooner. 7-10 years may seem like a long time, but knowing there’s a light at the end of the tunnel can help you plan for the future.

It’s also helpful to distinguish how different factors impact your credit report. A late payment won’t hurt your credit score as much as when it first appeared on your credit report, and diminishes in importance with each passing year. More serious issues like debts that have been sent to collections, foreclosures, and bankruptcy are considered serious indicators of risk. These issues take longer to repair.

But regardless of the information on your credit report, you don’t have to spend years twiddling your thumbs, waiting for negative information to drop off. You can make good use of the time by actively working to improve your credit.

Everyone is entitled to a free credit report each year, so you can monitor your credit score for improvements. You can also make improvements by making loan payments on time, keeping your credit card balances low, and avoid applying for new lines of credit unless absolutely necessary.

However, keep in mind that not all negative information on your credit report drops off with age. Unpaid judgments and unpaid tax liens can potentially remain on your credit report indefinitely, so if you’re dealing with these issues, it’s crucial to take care of them.

Above all else, patience will be an important virtue while working to repair negative credit information. It may be difficult to put off your dreams for a few years, but being proactive can help make your dream come true in time.