Knowing when a negative item is scheduled to naturally fall off a credit report should be very straightforward, but it’s not always so simple.
We all know about the 7 year rule - the one that says, negative items are supposed to fall off after 7 years. Right?
It’s a little more complicated than that. Let me explain.
Before I dive in, let’s be super clear. I'm not talking about the statute of limitations. That’s a totally different topic that determines how long a company can bring legal action against you. That has absolutely nothing to do with how long an item can stay on your report.
So what happens to negative items and what do you need to know to get your clients results?
- Negative items on a credit report - such as charge-offs, collections and repossessions will not stay on your credit report permanently. But, they all are scheduled to be removed within about 7 years.
- Some items like inquiries don't stay nearly as long.
- Other items like bankruptcies can stay even longer.
So, when a client asks you, “How long will a negative item stay on my report?”
You could say, “About 7 years" because technically, some are less, but some are more.
For instance collections have an extra 180 days added to the 7 years, making it actually 7.5 years total that needs to expire after the Date Of First Delinquency before the item naturally falls off.
Which brings me to another point that gets a lot of #CreditHeroes confused.
What exactly is the Date of First Delinquency and how do I find it?
The “Date of First Delinquency” is the date you were first 30 days late and failed to bring the account current. We call this DOFD for short.
The DOFD should never change, but unfortunately some unscrupulous creditors and debt collectors intentionally push this date forward to keep the debt reporting longer in hopes they will have a better chance at collecting the debt.
There are a lot of different sources you can get a credit report from and very few make the DOFD date clear so it’s often really difficult to just look at the report and know when an item is scheduled to fall off unless the report clearly says “this item is scheduled to fall off in March 2025.”
For example, if you purchase a direct report from Experian or TransUnion, it will usually show it, but Equifax won’t show you and virtually all of the credit monitoring sites won’t either.
Luckily there is a relatively simple way for you to find out for your client.
This is how you do it…
Send a letter to the bureau. Ask them to provide the FCRA Compliance/Obsolescence Date and the month and year the item is scheduled to be removed.
That's simple! Right?
So, now if you ever need to know exactly when items should fall off - you know how to find out and if not, you know it's accurate to say "about 7 years".
If you’re ready to know more about how disputing works or you want to launch your own credit repair business, we’ve created the Credit Hero Challenge just for you! I invite you to join today and within just a couple weeks you’ll be certified in disputing, and well on your way to being your own boss, taking control of your financial future, and changing a whole lotta lives!