A few stacks of quarters, a credit card, and the words "Negative Information on Credit Reports

Your credit score can have a major impact on different aspects of your life, such as your ability to get approved for a loan. Unfortunately, if you have a less-than-ideal credit score, you may have a hard time getting approved for financing—especially at a reasonable interest rate. As a result, you may be unable to purchase a car, buy a house, or even get approved for an apartment rental.

The good news? Bad marks on your credit report don’t stay there forever. Eventually, even some of the worst negatives will drop off your credit report and no longer affect your life. Still, the specific amount of time negative information stays on your credit report can vary depending on the type. This information can help you determine how much longer you’ll be penalized for a specific financial misfortune.

Late Payments

Making timely payments on all your debts is one of the best ways to keep your credit score high. Unfortunately, all it takes is one late or missing payment to significantly impact your credit score. In most cases, a late payment will stay on your report for seven years before dropping off, regardless of how late the payment was or how small the charge was.

If you miss a credit payment, the best thing you can do is call your lender immediately and ask for a one-time forgiveness. If you have great payment history, there’s a good chance your lender will oblige and not report your late payment to any of the reporting credit bureaus.

Foreclosures and Short Sales

If you’re unable to keep up with the payments on your home, you may have no choice but to either foreclose or opt for a short sale. Both of these will result in derogatory marks on your credit report since they involve settling a loan for less than the original amount due.

Unfortunately, both foreclosures and short sales will stay on your credit report for a full seven years. On the bright side, there are many federal and state programs in place that may be able to help you avoid foreclosure or a short sale altogether, so be sure to explore your options.

Inquiries

Inquiries can hurt your credit, even though they don’t usually mean you’ve done anything wrong. There are two types of inquiries: hard and soft. A hard inquiry occurs when you apply for a new line of credit, such as a mortgage or a credit card. The inquiry occurs when the lender runs your credit to check for eligibility. When a hard inquiry occurs, it will stay on your report for two years—but the good news is that it will only affect your credit score for 12 months. Even then, the impact a hard inquiry has on your credit score is generally pretty small.

A soft inquiry, on the other hand, occurs when a current lender reviews or makes changes to your account. Fortunately, while these inquiries will show up on your report, they do not affect your score at all, so they’re generally nothing to worry about.

Bankruptcies

If you have recently filed for bankruptcy, then you’ve probably noticed a substantial hit to your credit score. Unfortunately, bankruptcies can stay on your credit report for up to a decade. The specific amount of time you can expect a bankruptcy to affect your credit score will vary depending on the type of bankruptcy for which you filed. In general, Chapter 13 bankruptcies are removed from a credit report after seven years, whereas Chapter 7 or 11 bankruptcies could remain for up to a decade after the date you filed.

Collections

If you miss enough payments to a creditor that your account ends up being sent to collections, things can get a little complicated. In general, reports of collections stay on your credit for seven years from the date that the account was sent into collections. However, they can stay on your account longer if your creditor chooses to report the collection from the date your last bill was due. For example, if your last missed payment was 100 days before the account was officially sent into collections, then this could end up remaining on your credit report for seven years and 100 days.

All it takes is one financial mistake to hurt your credit for years, so it’s important to exercise financial responsibility. For more help in rebuilding your credit after a derogatory event, contact our team at Build My Scores today. We specialize in credit restoration and credit monitoring to help you keep your keep your scores as high as possible.