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  #16  
Old 12-20-2006, 10:33 AM
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taiarain taiarain is offline
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Default Re: Is it seven years?

After 7 years of inactivity, the debt will drop off of your credit report. However, your credit rating isn't based solely on that and reviews of bad debts are often required in mortgage lending.

If the debts are five years old, it won't affect you as negatively as a debt that is five months old. However, both debts will remain on your report until seven years from your last payment or activity. Paying on it will make it more relevant from a timeline perspective and show you as past due each month until it is paid off. The thing to do is save up the money to pay it off in one chunk. Then, while new activity is being reported on the debt, the activity is a $0 balance.

Paying off your bad debts and keeping your current credit clean will have an immediate positive impact on your credit score. Ignoring your debts will have a negative impact that wears off over time. If you clean up all your debts, you can watch your credit rating improve each month. If you leave them, all you can hope is that they expire from your credit rating before your creditors take you to court.
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  #17  
Old 12-20-2006, 12:39 PM
riskey58 riskey58 is offline
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Default Re: Is it seven years?

I have always heard that it was seven years. But I really do not know for sure. It could be longer or shorter. I would like to find out because I really think it is a good thing to know.
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  #18  
Old 12-20-2006, 11:37 PM
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kelkat kelkat is offline
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Default Re: Is it seven years?

I'm confused. You mean to say that by not paying on a debt I cause the account to go "inactive?" I would think having a balance on it, and a monthly interest charge would keep it active and passed due until I paid it off.

I'm not getting something here.
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  #19  
Old 12-21-2006, 10:15 AM
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taiarain taiarain is offline
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Default Re: Is it seven years?

Riskey: By law, debts must be dropped off the credit report 7 years from the last point of consumer activity. It can drop before 7 years, but it is not allowed to remain longer than 7 years.

Kelkat: I think I know where the confusion is coming from. A bad debt will not continue to accrue interest for very long. A bad debt will be sold into collections and interest will stop accruing at that point. Without a change in the balance via interest or payment, there will be no consumer activity to report.
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  #20  
Old 12-22-2006, 12:59 AM
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kelkat kelkat is offline
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Default Re: Is it seven years?

Ah - but then the debt is in collections. Which brings us to a whole new situation. And that collections will show up on your report!
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  #21  
Old 12-22-2006, 09:58 AM
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Default Re: Is it seven years?

The collections will show on your report, but without consumer activity, they can't maintain it as an active file. If you don't pay, they have to drop it after 7 years. They know this, of course, and will play all sorts of games to get you to keep it active (and thereby an immediate threat).
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  #22  
Old 01-02-2007, 05:55 PM
Steve_Blisko Steve_Blisko is offline
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Default Re: Is it seven years?

It is 7 years from the date charged off to profit and loss or the date of adjudication as the case may be according to the FCRA (fair credit reporting act) section 605.

You can get these items off sooner if you know more about the circumstances and the law. If you need help post here.
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  #23  
Old 01-02-2007, 11:38 PM
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kelkat kelkat is offline
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Default Re: Is it seven years?

So basically the account has to be paid off in some shape, form, or fashion before the seven years start ticking down?
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  #24  
Old 01-03-2007, 12:14 PM
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taiarain taiarain is offline
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Default Re: Is it seven years?

Quote:
Originally Posted by kelkat View Post
So basically the account has to be paid off in some shape, form, or fashion before the seven years start ticking down?
No. What gets reported on your report every month can stay there for seven years. A debt won't be completely erased until 7 years after the month of the last activity reported. (If the last activity is getting sold into collections and you pay nothing, seven years later that has to disappear.)

Say you have $2k in debt on cards and lose your job. You didn't pick up mortgage insurance, CC insurance, etc and are now living off a tiny sum in unemployment. You can only pay $15/month toward this debt and that's from squeezing the cheeks.

You can send the $15/mo and avoid your CC company's calls. Unfortunately, it is below the minimum due and each month you are racking up late payments. 30 days later, you will have 1 missed payment. 30 days after that, you will have two missed payments, 1 being 30-days past due and the other 60. Another month later, you'll have three at 30, 60 & 90 days past due. Your interest rates will rise and you will shortly be exponentially increasing your debt with this card despite refusing to use it. The payment that is now 90 days past due must drop off your report in 6 years and 9 months. The one that is 60 days past due must drop off in 6 years and 10 months. The one that is 30 days past due must drop off in 6 years and 11 months.
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  #25  
Old 02-22-2007, 04:21 PM
choada777 choada777 is offline
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Default Re: Is it seven years?

What if, near the end of the seventh year, the collection agency sells the debt to another collection agency. Is the debt renewed for another 7 years?
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  #26  
Old 02-22-2007, 11:44 PM
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taiarain taiarain is offline
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Default Re: Is it seven years?

Sale of the debt to a new collection agency won't affect its placement on your credit report. There is no actual activity, only a change of ownership.
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  #27  
Old 02-23-2007, 08:50 AM
nangel78 nangel78 is offline
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Default Re: Is it seven years?

This is helpful information from you guys. I have been working on my own credit and this is good. Thanks!
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  #28  
Old 02-23-2007, 10:47 AM
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taiarain taiarain is offline
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Default Re: Is it seven years?

Any other questions? I write about financial topics and love going on and on about what I learn in my research.
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  #29  
Old 03-07-2007, 03:00 PM
ez_0429 ez_0429 is offline
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Default Re: Is it seven years?

Does anyone know if the 7 year law also applies for Federal Student loans? As far as I know, a student loan stays forever unless is paid.
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  #30  
Old 03-09-2007, 09:09 PM
sunshine sunshine is offline
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Default Re: Is it seven years?

Seven years is a long time to retain bad credit, you wouldn't be able to use you credit for anything though.
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