Key takeaways
- The time it takes debt and derogatory marks to fall off your credit report depends on the type of debt or mark it is.
- In general, most debt will fall off of your credit report after seven years, but some types of debt can stay for up to 10 years or even indefinitely.
- Certain types of debt or derogatory marks, such as tax liens and paid medical debt collections, will not typically show up on your credit report.
Generally, if you’ve missed a debt payment or haveaccounts in collections, it can stay on your credit profile for up to 10 years, depending on your situation.
The specific number of years an adverse credit mark lasts on your credit report depends partly on the type of debt and mark in question. But no matter the type, it will have less influence on yourcredit score over time, eventually falling off your credit report entirely.
To prepare yourself for what to expect in these scenarios, you’ll need to understand how late payments, defaults and other derogatory marks affect your credit. Let’s start with how long each type of debt and derogatory mark will stay on your report.
How long does debt stay on your credit report?
How long a collection stays on your credit report depends on the type of loan you have. Derogatory items may stay on your credit reports for seven to 10 years or more, according to theFair Credit Reporting Act.
Here’s how long you can expect derogatory marks, including specific types of debt, to stay on your credit reports:
| Type of derogatory mark | Length of time |
|---|---|
| Hard Inquiries | 2 years |
| Money owed to or guaranteed by the government | 7 years |
| Late payments | 7 years |
| Foreclosures | 7 years |
| Short sales | 7 years |
| Collection accounts | 7 years |
| Chapter 13 bankruptcies | 7 years |
| Unpaid student loans | Indefinitely, or 7 years from the last date paid |
| Chapter 7 bankruptcies | 10 years |
In 2017, the three credit bureaus decided to stop adding tax liens and civil judgements to credit reports, so any tax liens or judgements you have currently should not show up on your report.
Do you still have to pay a debt that fell off your credit report?
Your debt isn’t simply erased once it falls off your credit reports, but your liability for owing it might vary if the debt is past its statute of limitations. The statute of limitations varies depending on your debt, your state of residence and the state named in your card agreement. Because credit card agreements are based out of the state that their issuer is headquartered in, the laws they work with might differ from the ones in your home state. In general, though, the statute of limitations typically spans between three and 15 years, and agreeing to a settlement offer or payment arrangements can reset the time clock on the statute of limitations.
If you never paid off the debt and the creditor is within the statute of limitations, you’re still liable for it, andcreditors may try to collect the money. The creditor can call and send letters, sue you or get a court order to garnish your wages.
If you never paid off the debt, but it’s past its statute of limitations, the debt is now considered “time-barred.” How you act on a time-barred debt that’s fallen off your credit report is your choice. According to the Federal Trade Commission (FTC), you can do one of the following:
- Pay nothing
- Pay part of the debt
- Pay the total outstanding debt
Keep in mind: Regardless of which option you’re considering, talk to an attorney about your best path forward before contacting a debt collector.
Depending on your state, debt collectors might be allowed to call you to try to collect on a time-barred debt. However, creditors and debt collectors can’t sue you or threaten a lawsuit to collect on a debt that’s outside of the statute of limitations.
Should you pay debt that has passed its statute of limitations?
There are instances where borrowers feel compelled to repay time-barred debt even if the statute of limitations has passed. While you won’t face legal trouble for not paying, you might still want to repay the lender or creditor if doing so seems morally sound and gives you peace of mind.
If you’re looking to put your debt behind you and pay what you owe — or at least an agreed-upon part of what you owe — you’ll have to talk to your creditor. Before making the phone call, make sure you know:
- That the debt is legally yours
- The date of the last payment on the account
- How much you owe the creditor
- What you can realistically afford to pay per month or in a lump sum
Keep in mind: If you negotiate a payment for less than the full amount owed, get the payment agreement in writing from the collector before you send in any payment.
How long do collections stay on your credit report?
If a creditor’s information regarding an account’s delinquency is valid, the collections record will exist for seven years starting on the date it is filed.
Here’s how it typically works: When a creditor considers an account neglected, the account may be handed over to an internal collection department. The account’s debt is sometimes sold to an outside debt collection agency, indicating that the original creditor is trying to minimize its loss. This often happens when you are about six months behind on payments.
At that point, you will start to hear from a debt collector, who now has the right to collect the payment. Depending on the type of debt you have, a variety of countermeasures exist on behalf of creditors to prevent major financial losses.
Unsecured debts, like credit card debt andpersonal loans, are generally sent to a collections agency or can be handled internally. If you fail to pay a secured debt, like an auto loan or a mortgage, foreclosure and repossession are the most common approaches for creditors to begin regaining losses.
If a creditor’s information about a collection is inaccurate, a dispute can be filed against the claim. This generally updates the collection information but doesn’t remove it. If the collection information is entirely inaccurate or false, filing a dispute may require extensive evidence and even an investigation to remove any disingenuous reporting.
Medical debt collections
The rules around medical debt collections and credit reporting have changed over the years, most recently in July of 2022 and April of 2023. In July of 2022, Equifax, Experian and TransUnion enacted a rule to remove paid medical collections from their credit reports. Before that point, medical debt collections typically stayed on a person’s credit report for up to seven years, even after being paid off. The three credit bureaus also made the decision that unpaid medical collections would not appear on credit reports unless they’ve been in collections for at least a year.
In April of 2023, the three credit bureaus also began taking steps to remove all unpaid medical debt that totaled $500 or less from consumer credit reports.
These changes came about in part because of studies showing that medical debt isn’t necessarily an indicator of credit risk the same way debt from, say, credit cards or personal loans might be. For example, a 2014 study done by the Consumer Financial Protection Bureau found that “A large portion of consumers with medical debts in collections show no other evidence of financial distress and are consumers who ordinarily pay their other financial obligations on time.”
So, if you have unpaid medical debt that totals under $500, or if you have paid medical debt that had previously gone to collections, your debt should not show up on your credit report. If you have unpaid medical debt that’s been in collections for over a year and totals over $500, you could see it on your report until it’s paid off or settled.
However, it’s important to fully understand what constitutes medical debt in the eyes of credit agencies. Medical debt is unpaid money from your medical bill that you owe directly to the medical provider. This can include places like a hospital, lab or doctor’s office. However, if you paid your medical bill with credit, such as with a credit card or with a personal loan, that debt is no longer medical debt. It just becomes part of your credit debt.
Collections agency debt
Paying off a debt that has already been sent to a collection agency will help improve your credit score. However, payment at this point will not typically remove collections action from your credit profile. Instead, it’ll typically remain there for the standard period of seven years starting from the date it was filed.
Under certain conditions, however, the collections agency can remove the report from your credit profile early. One of those conditions, though rarely used, is known as a “pay for delete” letter.
“A ‘pay for delete’ letter is a negotiation tool where the collector or lender agrees to remove the account from credit reports in exchange for payment of the debt — typically more than the amount owed,” says debt relief attorney Lesley Tayne of Tayne Law Group. “This strategy is best suited for smaller lenders, as most major lenders are not open to this type of negotiation and is not something you should reasonably expect.”
While some in the debt relief industry might bring up the option of a “pay for delete” letter, it’s important to note that using one of these letters is extremely risky. This kind of letter violates the Fair Debt Collection Practices Act. So, if your collections agency agrees to your letter, accepts your payment, but doesn’t honor their part to remove the action from your credit profile, you’d have very little recourse to get them to do so.
A letter of goodwill to a creditor is another option — and a safer one — that can sometimes manage to get the negative item removed from a credit profile. This can be successful if the unpaid debt is an isolated occurrence and you have a long-standing history with the lender, according to Tayne.
What happens to your credit score when derogatory marks fall off your report?
Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point withinthree months to six years.
If a negative item on your credit report is older than seven years, you can dispute the information with the credit bureau and ask to have it deleted from your credit report.
Can you ask creditors to report paid debts?
Positive information on your credit reports can remain there indefinitely, but it will likely be removed at some point. For example, a mortgage lender may remove a mortgage that was paid as agreed 10 years after the date of last activity.
It’s up to the lender to decide whether it reports your account information to the three credit bureaus. That includes your debt that’s been paid as agreed. You can call the lender and ask it to report the information, but it might say no. However, you can add positive information to your credit reports by using your existing credit responsibly, like paying off credit card balances each month.
The bottom line
You can build healthy credit over time by making on-time payments, monitoring your credit report, keeping an eye on your credit utilization and avoiding unnecessary credit inquiries. It takes time to build credit, but it takes even more time to recover from neglected debt payments or other derogatory credit marks. Adverse credit marks influence your credit score less over time, but you should still try to avoid falling captive to your debt in the first place.
