If you’re in the habit of checking your credit reports, then you’re aware that the information on your reports tends to change over time. New accounts are added, new collections may be added, and new public records may be added. And, from time to time all of these things may even fall off of your credit reports.
When it comes to negative information, it’s easy to figure out how this type of information can legally remain on your credit reports. The Fair Credit Reporting Act (FCRA) sets strict rules regarding this type of information, which is generally between seven and 10 years. But what about the good information? How long does the good stuff stay on a credit report?
The FCRA doesn’t instruct the credit bureaus on how long they’re allowed to keep good information on your credit reports. Instead, it’s up to each credit bureau to decide the length of time positive credit remains. As in, it’s a matter of their policy rather than a matter of law. And like most credit-related topics, the amount of time positive information can stay on your credit depends on several factors.
In most cases, positive data will remain on your credit reports for either an indefinite period of time or 10 years. The tipping point that dictates which of the two timeframes will apply can be boiled down to the answer to a simple question — Is the account open or closed?
Open positive accounts can stay on your credit reports indefinitely, as in forever. Think about your 30-year mortgage or that credit card you’ve had since before the turn of the century. As long as it’s still an active account in good standing, it’s going to be on your credit reports.
Closed positive accounts generally stay on your credit report for 10 more years after account closure. As of the publication date of this article, the credit bureaus all have the same policy, which is to remove the good stuff after it has been inactive for a decade.
To be clear, a “positive” account is one that is not in some sort of terminal status. In other words, positive accounts are not in default, not in collection status, and haven’t been settled, foreclosed upon or repossessed. They are, in credit reporting terms, current and paid as agreed.
Again, the FCRA sets limits regarding how long negative items can remain on your credit reports. Most derogatory information must come off your credit reports after seven years. However, some negative items are allowed to remain on your reports for up to 10 years or even indefinitely.
7-Year Time Limit: Late payments, charge-offs, repossessions, foreclosures, collections, settlements.
10-Year Time Limit: Chapter 7, 11 and 12 bankruptcies are allowed to remain on credit reports for 10 years from the filing date. Chapter 13 bankruptcies are allowed to remain for 10 years from the filing date or 7 years from the date of discharge, although as of the date of this blog the credit bureaus delete Chapter 13 seven years from filing.
No Credit Reporting Time Limit: Unpaid, defaulted student loans can stay on your credit report indefinitely. And, when tax liens were picked up by the credit bureaus, a practice that ended in mid-2017, they too were allowed to remain indefinitely if they were unpaid.
The FCRA lets you dispute information on your credit report with which you disagree. So, you can dispute positive information if you so choose. But, you’d be doing so at your own peril.
If a dispute is successful and a credit bureau removes a positive account from your credit report, the deletion might impact your scores in the following ways:
Length of Credit History: Removing a positive account from your credit report could reduce your length of credit history — a meaningful category in your FICO and VantageScore scores.
Thin File: If you remove a positive account or accounts from your credit reports and you don’t have enough other credit remaining, your report might become classified as a thin file. Thin files don’t score as well and are subject to considerable score volatility.
Credit Mix: Having a healthy mixture of installment and revolving accounts can benefit your credit scores. If the deletion of a positive account creates an imbalance in your credit reports your scores may go down.
The smart play is to leave the good stuff alone. You want as much good information on your credit reports as possible. So, before you send a dispute to the credit bureaus you may want to consider the downside if you are successful because you can’t change your mind after the item has been removed.