Things to know about removing old debt from your credit report.
As a credit counseling agency, we get A LOT of questions about negative marks on credit reports. Many people want to know how to quickly remove these items. Well, you can’t. But, the good news is there are laws in place to make sure you don’t suffer from negative entries for the rest of your life.
Many times people confuse two issues with old debt – the statute of limitations and length of time information remains on their report. The statute of limitations refers to the amount of time a creditor can attempt to collect on a past due debt. Once a debt has reached its statute of limitations, it is considered time-barred. In this instance, the law would no longer consider the debt collectable. The amount of time it takes a debt to become time-barred varies from state to state. Here is an interactive chart on state statutes via creditcards.com. Ok, no on to the length of time information can remain on your credit report. Thankfully, this is rather straight forward. After seven years from the original date of delinquency the debt becomes eligible for removal (five years for NY state residents.)
Now, the best way to avoid negative entries is to make your payments on-time. If you fall behind, develop a plan to catch your account up to a current status, and negative entries will age into obscurity (the longer the information remains on your report, the less weight it has on your credit score.) For more information on this topic, check out – How Long Does old Debt Stay on Credit Reports?
As a reminder we’re holding a contest in celebration of Financial Literacy Month. If you answer the most questions correctly throughout the month, you could win a coaching session with ‘America’s Money Answers Man,’ Jordan Goodman. To enter, simply answer our Question of the Day at Cambridge Credit’s Financial Literacy Month Contest.
Until next time I’m Thomas Fox for Cambridge Credit Counseling Corp.