How Long Do Negative Marks Stay on Your Credit?

2 Min. Read

Your credit history plays an important role in your financial life, but what happens when you make a financial mistake, miss a payment, or default on a loan? Negative credit marks, like late payments or bankruptcies, can leave a lasting impact on your credit report. Many people wonder, “How long do these negative marks stay on your credit?” Let’s take a look

Types of Negative Credit Marks

Let’s look at the different types of negative credit marks:

Late Payments

Occur when you don’t pay your bills on time.

Collections

Happens when a debt is sent to a collection agency due to non-payment.

Bankruptcy

A legal declaration that you cannot repay your debts.

How Long Do They Stay?

Negative marks can have a lasting effect on your credit. Here’s how long they stay on your credit report.

Late Payments

Typically, late payments can stay on your credit report for seven years from the original delinquency date. If you missed a payment in January 2020, it would be removed from your report in January 2027.

Collections

Similar to late payments, collection accounts can also remain on your credit report for seven years, starting from the date the account first became delinquent, leading to the collection.

Charge-offs

Charge-offs occur when a creditor writes off your account as a loss because they believe you won’t pay it back. Many people don’t realize the balance is still owed and can remain on your credit report for seven years from the original delinquency date.

Settled Accounts

If you work with a lender to settle a debt for less than you owe, it’s marked as “settled” rather than “paid in full.” This record of debt settlement remains on your credit report for seven years.

Foreclosures or Repossessions

Foreclosure occurs when a lender takes back a home after missed mortgage payments. Repossession is when an asset (like a car) is taken back by the lender due to missed payments. Both events will stay on your credit report for seven years.

Bankruptcy

Bankruptcy, whether Chapter 7 or Chapter 13, can linger on your credit report for ten years. It’s a significant mark, but, as time passes, its impact lessens.

Impact on Your Credit Score

These negative marks can significantly lower your credit score, making it harder to qualify for new credit or loans. However, their impact lessens over time, especially if you focus on rebuilding your credit by making on-time payments and managing your finances responsibly.

Consistently paying your bills on time helps improve your credit score over time. Work on paying down existing debts and avoid taking on new ones. Also, regularly monitor your credit report for inaccuracies and dispute any errors you find.

If you’re facing financial difficulties, be proactive and talk to your creditors. They may offer hardship programs or repayment plans to help you get back on your feet. Remember, negative marks will fade away with time as long as you practice good financial habits.

Are you working toward rebuilding your credit? Reach out to Marine Credit Union, and one of our financial professionals will help you get back on track with your credit management.