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Understanding Credit Report Entries: How Long They Last and How to Improve Your Credit

At O1ne Mortgage, we understand the importance of maintaining a healthy credit score. Whether you’re looking to buy a home or refinance, your credit report plays a crucial role. Call us at 213-732-3074 for any mortgage-related needs. Here’s a comprehensive guide on how long different items remain on your credit report and tips to improve your credit score.

How Long Negative Items Remain on Your Credit Report

Negative entries on your credit report, which can impact your credit scores and be seen by lenders as signs of poor credit habits, typically remain for up to seven years. The exception is Chapter 7 bankruptcy, which stays for 10 years. Here’s a breakdown:

• Defaults: Seven years from the original delinquency date. A default is recorded if you miss a scheduled payment for 90 days.
• Accounts in collections: Seven years from the original delinquency date. Accounts are usually handed over to collections after several months of missed payments.
• Foreclosures: Seven years from the original delinquency date. Foreclosure can be initiated after 90 days without a payment, with property seizure occurring after at least 120 days.
• Late payments: Seven years. Missed payments that don’t lead to more severe negative events expire after seven years.
• Chapter 13 bankruptcy: Seven years from the filing date. This type of bankruptcy involves full or partial repayment of creditors.
• Chapter 7 bankruptcy: Ten years from the filing date. This allows you to keep exempt property, sell certain property to repay debts, and discharge remaining debts.

How Long Positive Items Remain on Your Credit Report

Positive entries, which benefit your credit scores, remain for at least 10 years. Examples include:

• Closed, positive accounts with no negative history: Ten years from the closure date. This includes installment loans paid off as agreed and credit card accounts in good standing that you choose to close.
• Open accounts in good standing: May remain indefinitely. The payment history on open credit card accounts can stay indefinitely, contributing to your credit history length and timely payment record.

How to Improve Your Credit

If your credit report contains negative entries, your scores may be affected, but there are steps you can take to improve them:

• Pay your bills on time: Timely payments are crucial for your credit score. Even one late payment can significantly harm your scores. Make it a habit to pay bills on or before their due dates.
• Avoid high card balances: Keep your credit utilization below 30% of your available credit limit to avoid hurting your scores.
• Apply for new credit only as needed: Hard inquiries from loan or credit applications can cause short-term dips in your scores. Avoid multiple applications in a short period.
• Cultivate a healthy mix of credit accounts: Managing a combination of revolving accounts (credit cards) and installment loans (mortgages, auto loans) can favor credit score improvement.
• Stay the course: Negative entries will eventually expire. Maintaining good credit habits and avoiding further missteps will help your scores rebound over time.

The Bottom Line

While seven years (or 10 years for Chapter 7 bankruptcy) may seem long, it’s not forever. The negative impact on your credit scores will diminish over time if you focus on building good credit habits. Track your credit score recovery by checking your score from Experian for free each month.

For any mortgage-related needs, don’t hesitate to call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence.

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