Negative Information Falling Off Your Credit Report

We’ve talked before about the difference between credit repair and righting consumer law violations here.

So with that in mind, let’s talk about a commonly discussed issue that comes up regularly when negative information pops up on credit reports. What does it mean when someone tells you “Don’t worry about that ding on your credit report, it’ll drop off in 7-10 years”?

First of all, what’s a ding on your credit report?

Any negative information reported accurately or inaccurately on your credit report. Remember that inaccurate information on your credit report, such as an entry that suggests a debt wasn’t paid off when it actually was, can be addressed and fixed through the Fair Credit Reporting Act. If you have wrong information on your credit report, truly-wrong-and-not-just-wishful-thinking-wrong, you should go through the process to get it fixed, starting by reading my post on what the Fair Credit Reporting Act here.

Now we come to accurate negative information on your credit report. Maybe you missed a few rental payments on your apartment, or you didn’t pay your credit account at Sherwin Williams (that’s an actual case), and those debts were turned over to collections. Those are “dings” on your credit report. Those types of entries are negative information that can affect your credit score.

So do these dings really fall off your credit report at some point?

Yes and no.

15 U.S.C. 1681c(a) lists each entry that has a shelf life on a credit report. No credit reporting agency may generate a credit report with the following information:

  1. Bankruptcies older than 10 years (time begins when the order for relief is entered)
  2. Civil suits, civil judgments and records of arrest older than 7 years (time begins on the date of entry)
  3. Paid tax liens older than 7 years (time begins on date of payment)
  4. Accounts placed for collection older than 7 years
  5. Any other “adverse item of information” older than 7 years (except for convictions for crimes)

There’s the official list of dings that do fall off your credit report after a certain amount of time. There are exemptions and more details surrounding timing of when the clock begins to run, of course, but hopefully this provides some good, basic information when you spot a ding on your credit report.

What is the Fair Credit Reporting Act?

The FCRA is a piece of legislation passed by Congress in 1972 to ensure accuracy in credit reporting, and to ensure fairness in credit reporting. It affects two groups: anyone who has a credit history, and the credit reporting agencies, like TransUnion, Experian, and Equifax.
very shallow depth of field and very low perspective


Why does Congress care about regulating how accurately or fairly these agencies are reporting your credit history to other entities like banks or employers? Let’s look to the source – Congress included a “findings and statement of purpose” to explain why our elected politicians thought this was so important.
Here are the four main reasons Congress found for regulating this industry:
  1. “The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system.
  2. An elaborate mechanism has been developed for investigating and evaluating the credit worthiness, credit standing, credit capacity, character and general reputation of consumers.
  3. Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers.
  4. There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” 15 U.S.C. 1681.
In other words, if credit reports are not properly maintained and accurately reported…
-We risk the effective functioning of the banking system (wait, didn’t that happen in 2008 already? Subprime mortgage crisis in the banking system? I digress.);
-Your general worth as an individual is wrapped up in your credit report, at least, to financial institutions and employers and possible future dates who like to do their “due diligence” before going on a blind date (I kid. Sort of.)
-Credit reporting agencies are basically the gatekeepers of this information and they should be accountable to the consumers for screwing up that information (if they screw it up)
-Oh, and respect the consumer’s privacy. I think there’s always some lip service done to protect the bounds of each citizen’s privacy.
So basically, if you haven’t noticed, there is a complex web that has been woven in the U.S. around consumer credit reports. These data-driven pockets of information that many, many people rely on to make decisions about loans, employment, or renting a home to someone have been recognized by Congress as important enough to provide for consequences if these pockets of information contain mistakes.
Because the last thing you need is some blip on your credit report that affects all of your future dealings in home ownership, car ownership, employment, or ability to take out any kind of loan. Especially if that blip is a mistake. It shouldn’t be on your credit report in the first place.
Unfortunately, mistakes are common and prolific in the credit reporting industry, and Congress recognized this.
And Congress created a call to action! Put down your pitchforks, put out your flaming torch, because Congress, through the FCRA, requires (wait for it!)…. that consumer reporting agencies adopt “reasonable procedures.”
“It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.” 15 U.S.C. 1681.
ice cream fail
Wah wah. Does that leave you wanting a little more meat on the bones to chew on? In later blog posts, I’ll break down some of the FCRA’s definitions, violations, and penalties to see what kind of teeth the FCRA has to protect your credit reports.