REMOVING DEROGATORY INFORMATION

Credit reports are insanely confusing, especially to people that have no knowledge of the credit world. Various terminologies make understanding your report hard. 

When it comes to removing derogatory information there is a lot that consumers do not know. “Derogatory” information means information that varies from the norm or what would be expected to be seen on a credit report. So, this means any unusual information that may pop up on your credit report. All of this information should be removed from your credit report after the statute of limitations is up. The statute of limitations is a timeline set by the credit bureaus limiting how long this information can be left on your report and potentially held against you. It is important to look over your report thoroughly to make sure that this information is removed in a timely manner. 

There are a few important timelines to look out for:

Bankruptcy - must be removed 10 years after the date of discharge from the bank.

Judgements - must be removed 7 years after the date it was entered. 

Chargeoffs and late payments - must be removed 7 years from the date the account was charged off.

All other derogatory items - must be removed after 7 years. 

You have to note that a lot of legal authorities believe that the 7 year statute of limitations runs from the day that the debt went bad, NOT from the date the account was paid in full. As well as the fact that credit bureaus may remove derogatory information from your report but they maintain the information where it can be recalled. However, information that was found indeed inaccurate or non-verifiable then they will delete that information. Deleted items are not kept where they can be recalled or reappear on a credit report. 

Many creditors will try to keep this information on your credit report as long as possible even if it should be removed. A trick they use could be pushing forward the status date forward every two years until the account is paid. So, if your account goes undisputed the derogatory information will continue to be shown on your report longer than the statute of limitations allows. This could cause a creditor to write your account off as bad and have it be reported to a credit bureau, then sell the account off to a collection agency. 

Information pulled from: 

Notley, S. Credit solutions: Proven strategies to establish and re-establish your credit. The Manning Group

If you ever have questions, contact us - your expert consultants. 

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Solutions Team