Credit Bureaus – Learn the Truth about Credit Reporting

Many people want to know how long a negative notation will stay on their credit report. The answer to this is seven long years. If you have a bankruptcy or judgment the notation can stay on your report for up to ten years.

Most people feel like this is an undeserved prison sentence they have been given. During this time they can not move into a house or purchase a new car at a reasonable interest rate.

Seven years – why?

Should a single slip-up deserve a seven year punishment? Should you have to live with a bad credit report for being out of work for a few months, even when we caught up on our bills soon after?

Why is seven years the magical number? Has it been discovered that people will not make mistakes or run into financial hardship after seven years?

Of course not, there is no good reason whatsoever for the seven year reporting law. It is a completely arbitrary time limit.

The Fair Credit Reporting Act was passed by congress in 1970. This piece of legislation established the reporting time limit. Before the Fair Credit Reporting Act a negative notation stayed on your credit report forever.

Congress placed this time limit on the credit bureaus. Do not be mistaken and believe that a negative notation must remain on your credit report for seven years. That is the maximum not the minimum.

In other words, it is illegal for a credit bureau to report bad credit for more than seven years. Of course, there are many occasions where people rid themselves of negative items long before seven years.

Creditors and collection agencies are not required to report a listing. This is completely voluntary on behalf of the creditors and collection agencies. Furthermore creditors and collection agencies have often removed negative marks before the seven year limit.

Typically the creditors and collection agencies just need some influence to remove a mark. This influence should come from a well crafted dispute letter or a good credit repair attorney. The credit bureaus will also give you some credit repair once the seven year time limit runs out.

In a perfect credit world negative marks would remain on a credit report forever. So long as they accurately reflected the credit worthiness of the applicant. Instead our credit reports are an excuse for creditors to assign outrageous interest rates and down payments.

However, the sad truth is that for now we are stuck living with the seven year limit. However, why should we wait to repair questionable credit until some arbitrary limitation has elapsed? Why shouldn’t we delete questionable and misleading information immediately so that we can become creditworthy again?

For All of your INCORPORATING needs contact Samuel Wierdlow Inc. (www.SamuelWierdlowInc.info)