How long can negative information hurt your credit score?

When negative information shows up on your credit report, there’s a good chance it may hurt your credit score. From late payments and collection accounts to charge-offs and bankruptcies, derogatory credit information can have varying degrees of impact where your credit score is concerned.

Negative credit items also have the potential to hang around for a while, and could make it harder to qualify for new financing (like credit cards and loans) as long as they’re present. But those credit blemishes can’t stay on your credit report forever. Here’s when you can expect to see some light at the end of the tunnel.

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Negative information and your credit score

As a consumer, it can be difficult to understand how credit scores work. One of the main sources of this difficulty is the fact that specific items on your credit report (a.k.a. credit score factors) aren’t worth a preset number of points.

For example, when a new 30-day late payment shows up on your credit report, you won’t automatically lose 20 points — or any set number for that matter. Technically, you won’t lose any points at all. But you might earn fewer points, and that could result in a lower number the next time your credit score is calculated.

Instead, credit scoring models like FICO and VantageScore consider all of the information on your credit report at once. A new collection account might cause a bigger credit score decline for someone with an otherwise clean credit report than it would for someone who already has credit blemishes. Nonetheless, the person with the overall cleaner credit report would likely wind up with the higher credit score.

How long does negative information hurt your credit score?

Two other details play a role in how negative information impacts your credit score: recency (or age) and severity. Here’s a look at how these two factors can come into play.

Recency: A more recent late payment would probably hurt your credit score more than a late payment that is several years old.
Severity: A 90-day late payment tends to be more damaging than one that is 30 days late.

As you can see, negative credit information typically does the most damage to your credit score when it first appears on your credit report. Although derogatory information might hurt your credit score as long as it shows up on your credit report, the impact should become less pronounced over time — especially if you can avoid additional derogatory credit items.

Credit reporting time limits

Any item on your credit report has the potential to affect your credit score — for good or ill. So, if you make a mistake and end up with damaging information on your credit report, it’s a good idea to learn how long those issues might be a problem.

The Fair Credit Reporting Act (FCRA) is a federal law that regulates the three major credit bureaus (and others). According to the FCRA, most types of derogatory credit information have a maximum shelf life of seven or ten years. There are, however, a few exceptions to this rule.

Here’s a helpful chart to help you figure out how long the information on your credit report might stick around.

Types of credit information
Credit reporting time limit

Late payments
Collection accounts
Medical collections
Charge-offs
Chapter 13 bankruptcy
7 years.

Chapter 7 bankruptcy
Accounts closed in good standing
10 years.

Credit inquiries
2 years.

Defaulted federal student loans
Indefinite.

Read more: How does applying for a new credit card affect my credit score?

What to do about incorrect or outdated items on your credit report

There’s not much you can do to get an accurate but negative item removed from your credit report early. Unless you can talk a creditor into a goodwill removal (which is a long shot), most derogatory items will stay on your credit report for as long as the law allows.

But if an item on your credit report is inaccurate or it’s been there for longer than the FCRA permits, there are a few actions you can take.

Dispute: Per the FCRA, you have the right to dispute any incorrect or outdated information on your credit report. You can send disputes online or via mail, but the Federal Trade Commission (FTC) recommends using certified mail (return receipt request) for dispute letters. This free FTC guide can help you navigate the dispute process.
Complain: In addition to disputing the incorrect information on your credit report, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).
Escalate: If disputes and complaints don’t fix your problem, you might consider talking to an attorney who specializes in the FCRA. An attorney can help you discover if your rights have been violated and may be able to offer additional avenues to try to correct credit reporting errors.

Bottom line

Negative items on your credit report have the potential to damage your credit score. It can also be harder to qualify for financing when blemishes appear in your credit history.

Your best bet is to try to avoid issues like late payments, charge-offs and collection accounts in the first place. But if you do make a mistake (or have an error show up on your credit report), all hope isn’t lost. You can work to improve your credit and try to put yourself back in a better position for the future.

Featured photo by Casper1774 Studio/Shutterstock