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Understanding Credit Reports: How Long Information Stays and Its Impact on Your Credit Score

At O1ne Mortgage, we understand that your credit report plays a crucial role in your financial health. Whether you’re looking to buy a home, refinance, or simply improve your credit score, knowing how long different types of information stay on your credit report is essential. In this comprehensive guide, we’ll explore the duration of various credit report entries and their impact on your credit score. For personalized mortgage services, call us at 213-732-3074.

How Long Information Stays on Your Credit Reports

Your credit report is a detailed history of your financial interactions with creditors. Different types of information, both positive and negative, have varying durations on your credit report. Here’s a breakdown:

• Open accounts in good standing: Indefinitely
• Closed accounts in good standing: 10 years from the closure date
• Chapter 7 bankruptcy: 10 years from the filing date
• Chapter 13 bankruptcy: 7 years from the filing date
• Collection accounts: 7 years from the original delinquency
• Late or missed payments: 7 years from the original delinquency
• Default, including foreclosure, repossession, and settlement: 7 years from the original delinquency
• Hard credit inquiries: 2 years from the date of the inquiry

How Long Does Negative Information Remain on Your Credit Reports?

The Fair Credit Reporting Act (FCRA) governs how long certain information can legally remain on your credit reports. Negative items, particularly those related to payment history, can significantly impact your credit score. Here’s a closer look:

• Chapter 7 bankruptcy: Stays on your credit reports for 10 years due to the liquidation of certain assets.
• Chapter 13 bankruptcy: Remains for 7 years as it involves restructuring debts for partial repayment.
• Collection accounts: Appear for 7 years from the date of delinquency.
• Late or missed payments: Stay for 7 years from the original delinquency date.
• Default: Remains for 7 years from the original delinquency date, including foreclosures, repossessions, and settlements.

While these negative items can remain for a long time, their impact on your credit score diminishes over time, especially with good credit habits.

How Long Does Positive Information Remain on Your Credit Reports?

Positive information on your credit report can benefit your credit score for a long time. The FCRA doesn’t require creditors to remove positive information, so it typically stays as long as the account is open. After closing an account or paying off a loan, the positive information remains for 10 years.

How Long Do Inquiries Stay on a Credit Report?

Credit inquiries occur when an institution requests to review your credit file. There are two types of inquiries:

• Hard Inquiry: Appears when you apply for credit and stays on your report for 2 years, affecting your FICO® Score for 1 year.
• Soft Inquiry: Occurs without your express permission, such as preapproval offers, and stays for 2 years without affecting your credit scores.

How to Remove Negative Information From Your Credit Report

If you find inaccurate information on your credit report, you have the right to dispute it with the credit bureaus. Provide the reason for your dispute and any supporting documentation. The credit bureau will typically resolve it within 30 days, either verifying, correcting, or removing the information.

Time Is on Your Side

Even the worst credit mistakes can fade away with time. Positive information on active accounts remains indefinitely, while negative information and positive information on closed accounts will eventually fall off. If you’re uncertain about your credit health, consider registering for a credit monitoring service to get a better understanding of how certain items influence your credit score.

At O1ne Mortgage, we’re here to help you navigate your financial journey. For expert mortgage services, call us at 213-732-3074. Our team of professionals is ready to assist you with all your mortgage needs.

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