How long do derogatory marks stay on your credit?

  • Blog
  • How long do derogatory marks stay on your credit?
Contact Us
1
2
3
23 Apr, 2024
7 min
1209
how long do derogatory marks stay on credit

Derogatory marks have varying lifespans on your credit report

The length of a derogatory mark on a credit report depends on the type it is.

A derogatory mark is an indication on your credit report that you failed to make a payment on time. These negative items are among the factors that cause your credit score to drop.

Understandably, if you have a derogatory mark on your credit report, you’d want it removed as fast as possible. This begs the question of how long certain derogatory marks will stay on your credit report.

While the timespan of each mark may vary, the impact of each one lessens with time. Let’s discuss the types of derogatory marks and how long they last on credit reports:

1. Chapter 7 bankruptcy

In Chapter 7 bankruptcy, assets are sold in order to pay off your debts. This typically wipes off the majority of your debts, providing you with a clean slate to start rebuilding your credit.

Chapter 7 bankruptcy remains on your credit report for 10 years.

2. Chapter 13 bankruptcy

In Chapter 13 bankruptcy, the court assists you by creating a repayment plan. The plan usually distributes repayment across 3-5 years. Upon the completion of the plan, the eligible remaining debt is discharged.

Chapter 13 bankruptcy remains on your credit report for seven years.

3. Late and missed payments

A payment history riddled with late payments and missed payments is often bad for your credit. While payments that are only a few days late might not show up on your credit report, it will certainly appear if the period advances to 30, 60, or 90 days.

Late and missed payments typically stay on your credit report for 7 1/2 years.

4. Collection accounts

Sometimes, an original lender can sell the debt you owe them to a third party debt collector. This is how collections originate. The debt will remain in collections until you pay it off, you are sued, or the statute of limitation expires.

A collection account typically remains on your credit report for seven years following the original date of delinquency.

5. Charged-off accounts

A charged-off account is one which the original lender has deemed unlikely to be paid because you failed to or are entirely unable to pay according to the agreed-upon terms. Because of this, the lender has proceeded to close the account.

It’s only natural that the lender will sell the debt to a collection agency. Two accounts will now show up in your credit report: the closed charged-off account and the new collection account.

A charged-off account stays on your credit report for seven years.

6. Medical debt

Unlike regular debts and late payments, a medical debt is only reported on your credit report when it is 180 days late. However, the moment a debt extends beyond that time frame, it is sold to a collection agency and appears on your credit report as a collection account.

These account stay on credit reports for seven years.

7. Hard inquiries

Hard inquiries occur when a potential creditor assesses your credit before deciding whether or not to extend a credit product to you. It must be noted that hard inquiries do not count as derogatory marks at all times.

Also, multiple hard inquiries within a short period of time damage your credit score. So, while one hard inquiry might not be detrimental, many conducted over a short period can negatively impact your credit.

If the inquiries are of the same type, they usually count as a single inquiry and don’t have much of an effect.

Hard inquiries remain on credit reports for two years.

8. Student loan delinquency or default

Being 30 days late on private student loan payments, or 90 days in the case of federal student loans, causes the late payment to show up on your credit report.

Late payment of student loans stays on your credit report for seven years.

9. Repossession

If you cannot make payments for an item as agreed, the creditor can show up and repossess it. There is usually no legal obligation on their part to give you prior notice.

A derogatory mark of this nature stays on your credit report for seven years following the date the account was first reported overdue.

10. Foreclosure

Failure to make payments on your house might prompt the bank to seize it. If this occurs, the credit bureaus will be notified of the foreclosure.

The foreclosure will remain on your credit report for seven years.

11. Civil judgment

Sometimes, you can wind up on the wrong side of the judgment in a civil lawsuit. The judgment might require you to pay debt or damages, and such a requirement can show up on your credit report.

A paid civil judgment can remain on your credit report for seven years after the date the judgment was filed. For an unpaid civil judgment, the 7-year time frame might be renewed depending on local laws.

It’s worthy of note that as of April 2018, the three major credit reporting agencies had removed all civil judgments from credit reports.  

12. Tax lien

Failure to pay your taxes might prompt the federal government to try and collect the debt. One way to do this is by placing its “lien” against your property. A paid tax lien typically stays on credit reports for seven years following the original filing date, whereas an unpaid tax lien can remain indefinitely.

However, by April 2018, the three major credit reporting agencies also removed tax liens from credit reports due to inaccurate reporting.

13. Other derogatory marks

The Federal Credit Reporting Act clearly states that “any other adverse item of information, other than records of convictions of crimes,” remain on credit reports for seven years. This umbrella provision for every other kind of derogatory mark might not be significant enough to be identified separately.

If any derogatory mark on your credit report is erroneous, you have the right to dispute it and have it removed from your credit report. However, if they are not mistakes, you have no option other than to let them age off. Thankfully, as mentioned earlier, the negative impact of these derogatory items lessens with time.

If you’re dealing with erroneous derogatory marks or any other credit reporting errors, then reach out to us. We’ll gladly be of help.

imageDaniel Cohen is the Founding Partner of Consumer Attorneys
About the lawyer
Daniel Cohen
See more post

Daniel Cohen is the Founder of Consumer Attorneys. Daniel manages the firm’s branding, marketing, client intake and business development efforts. Since 2017, he is a member of the National Association of Consumer Advocates and the National Consumer Law Center. Mr. Cohen is a nationally-recognized practitioner of consumer protection law. He has a we... Read more

Contact Us
INVESTIGATIVE ENGAGEMENT AGREEMENT

You, (“Client,” “you”), and Consumer Attorneys PLC (“CA” or “we”), located at 8095 N. 85th Way, Scottsdale, AZ 85258 (“CA”) , hereby enter into this limited scope retainer agreement whereby you agree to grant CA the exclusive authority to investigate your potential consumer law claim(s), including but not limited to potential violations of the Fair Credit Reporting Act (“FCRA”), Fair Debt Collection Practices Act (“FDCPA”), Equal Credit Opportunity Act (“ECOA”), Electronic Funds Transfer Act “EFTA”), Fair Credit Billing Act (“FCPA”), and/or the Telephone Consumer Protection Act (TCPA”) (collectively referenced as “consumer protection statutes”). 1Please read carefully before signing:

Authorization

You authorize CA to investigate your potential consumer law claim(s) under state and federal consumer protection statutes. You authorize CA to contact third parties on your behalf for the limited purpose of investigating your potential consumer law claims. “Third parties” include but are not limited to consumer reporting agencies, creditors, lenders, debt collectors, rental agencies, employers, courts, and law enforcement agencies.

CA’s Exclusive Investigative Period

CA agrees to investigate your potential consumer law claims in good faith. By signing this agreement, you agree to give CA the exclusive right to investigate your potential consumer law claim(s) for the next 180 days (“Exclusive Investigative Period”). For the duration of the Exclusive Investigative Period, you agree that you will not communicate with any other law firm or legal representative about your potential consumer law claim(s). You agree to forgo any previously scheduled consultation or case review until CA’s Exclusive Investigative Period concludes.

Termination of Exclusive Investigation Period

CA agrees that the Exclusive Investigative Period may not extend beyond 180 days without your prior written consent.

At any time between the date of this agreement and the expiration of CA’s Exclusive Investigative Period, CA may inform you of the outcome of its investigation. If CA’s investigation reveals that you have an actional consumer law claim, CA may ask you to sign a formal retainer agreement. If CA’s investigation does not reveal an actionable consumer law claim, you will receive an e-mail that states CA will not represent you in any further pursuit of your potential claim(s).

The relationship between you and CA automatically terminates at 5pm on the 180th day of the Exclusive Investigative Period or your receipt of CA’s written notice to decline representation, whichever comes sooner. At the conclusion of the Exclusive Investigative Period or upon receipt of CA’s written declination of representation, you are permitted to seek alternative legal counsel without penalty.

Nothing in this agreement should be construed as a promise or guarantee that CA will represent you in a consumer lawsuit at any point in time. CA reserves the right to decline to represent you for any reason permitted by relevant laws and ethical rules.

Your Involvement and Promises to us

You agree to meaningfully participate and cooperate in CA’s investigation of your potential consumer law claim(s). You agree to immediately inform CA if your mailing address, e-mail address, or phone number changes at any point during the Exclusive Investigative Period.
You agree to provide all relevant information, communications, documents, materials, and all other similar instruments to CA and its representatives during the Exclusive Investigative Period. You understand that your failure to provide all relevant information, communications, documents, and materials to CA during the Exclusive Investigative Period may hinder, delay or otherwise frustrate CA’s investigation of your potential consumer law claim(s).

You agree, under penalty of perjury, to provide complete, accurate, and truthful information to CA. All documents and communications, oral or written, past or future, provided to CA during the Exclusive Investigative Period and anytime thereafter are presumed by CA to be true, complete, and accurate.

Fees and Costs Incurred During Exclusive Investigative Period

CA agrees that you will not incur any out-of-pocket fees or costs during CA’s Exclusive Investigative Period. However, if CA agrees to represent you in a consumer lawsuit, CA may recover the fees and costs incurred during the Exclusive Investigative Period from the Defendant pursuant to a future settlement or judgment.

You agree that CA has a right to place a lien on any future monetary recovery obtained by client related to the claims identified during CA’s Exclusive Investigative Period or as a result of CA’s investigative efforts. If you refuse to cooperate with CA in the formal pursuit of the consumer law claim(s) it identifies during or after the Exclusive Investigative Period, you agree that CA has the right to recover the fees and costs it incurred while investigating your potential consumer law claim(s).

Authorization to Use Your Electronic Signature

CA will send you any and all documents that require your signature. You authorize CA to affix your electronic signature to requests, disclosures, or other forms that CA deems reasonably necessary to the investigation of your potential consumer law claim(s) upon receipt of your approval or after the 7th day after the document was sent to you, whichever comes first. Your electronic signature will be used on any and all other subsequent documents that will need signature, affirmation, acknowledgment, or any other forms of authentication in reference to this matter under the above referenced procedure.

1You also agree to give CA the exclusive authority to investigate potential violations of state-specific consumer protection statutes.

All Rights Reserved. Without Prejudice. CONSUMER ATTORNEYS

FORM # INV2024CA119

I have read and agree to the Privacy Policy, Investigative Retainer
Supported file formats:

Attorney Advertising, Prior Results Do Not Guarantee A Similar Outcome. This website is for informational purposes only and does not contain legal advice. Results may vary depending on your particular facts and legal circumstances.

© 2024 Consumer Attorneys PLC. All Rights Reserved.