Credit Reporting Facts You Should Know
The next few posts will cover credit, and hopefully shed some light various issues that come up often, and many borrowers are unsure of.
Today's information is courtesy of Credit Technologies, the company that my branch uses for credit reports. They are very customer oriented and assist with getting our borrowers to put their best foot forward.
Payment history on your credit file is supplied by credit grantors with whom you have credit. This includes both open accounts and accounts that have already been closed.
I paid off an account – why is it still appearing on my credit report?
Payment in full of an account does not remove the account or the payment history from your credit report. The length of time information remains in your credit file is determined by each credit repository but is limited by the statute of limitations imposed by the Fair Credit Reporting Act (FCRA).
How long do items stay on my credit report?
Credit Accounts without delinquencies can remain indefinitely (typically removed after 10 years)
Credit Accounts with delinquencies will remain on the credit report seven years from the date of delinquencies.
Collection Accounts seven years from the charge off date, date of first delinquency or date of service.
Public Records
Civil Judgment is seven years from the date filed.
Bankruptcy – Chapter 7 is ten years from the date filed.
Bankruptcy – Chapter 13 completed is seven years from the date filed.*
Bankruptcy – Chapter 13 non completed is ten years from the date filed.
Tax Liens – paid is seven years from the date released.
Tax Liens – unpaid can remain indefinitely, subject to re-filing and State limitations.**
*Note – While the Fair Credit Reporting Act (FCRA) does not differentiate between Chapter 7 and Chapter 13 bankruptcies, the credit repositories generally limit Chapter 13 reporting to 7 years from the filing date.
**Any lender will require that unpaid tax liens be satisfied and documented prior to an Underwriter's approval.
Some states have more restrictive statute of limitations including:
New York State residents only: Satisfied judgments remain 5 years from the date filed; paid collections remain 5 years from the “date of last activity”.
California State residents only: unpaid tax liens remain 10 years from the date filed.
My divorce decree says my ex spouse is responsible, yet the account still appears on my credit report. Divorce decrees are not binding on original creditor contracts. Creditors can and often will continue to report the accounts in both parties’ names. Consumers must contact each creditor individually and attempt to negotiate any release of liability.
There are duplicate accounts on my credit report.
Apparent duplicate accounts will sometimes appear on tri merge reports due to limitations in merge logic. Some credit grantors also issue revolving and installment accounts with similar account numbers. Pay attention to which repositories are reporting the account in question. The item should only appear once on each repository.
The balances shown on my credit report are wrong.
Most tradelines are reported by the creditors monthly. The balances are correct as of the reporting date and don’t reflect any changes that may have occurred since the reporting date.
John Lyng is a Mortgage Loan Officer with Supreme Lending. He is experienced with traditional bank programs, as well as alternative programs to help people get into their home. John has a varied background in working with mortgage banks and non-profits, and believes in guiding families to prepare for affordable homeownership.
If you have questions about this or any mortgage-related topic, please contact John Lyng directly at 214-862-3579, or send an email to John.Lyng@SupremeLending.com.
