How Long Do Collections Stay on Your Credit Report?

Credit reports serve as a comprehensive record of an individual’s financial behavior, influencing access to credit, loans, and even housing. These reports compile information from various creditors and public records, painting a picture of financial reliability. Among the entries that can significantly impact a credit report are collection accounts, which arise when a debt goes unpaid for an extended period.

Understanding Collection Accounts

A collection account forms when a debt, such as a credit card balance, medical bill, or personal loan, becomes severely delinquent. Initially, an original creditor attempts to collect overdue payments directly. However, after a period of non-payment, often 120 to 180 days, the original creditor may deem the debt uncollectible. They might then transfer the account to an internal collection department, assign it to a third-party agency, or sell the debt to a debt buyer.

The collection agency or debt buyer then attempts to recover the outstanding amount. When this transition occurs, a new entry appears on the consumer’s credit report, indicating the account is in collections.

The Seven-Year Reporting Rule

Most collection accounts, whether paid or unpaid, remain on a consumer’s credit report for approximately seven years. This reporting period is governed by the Fair Credit Reporting Act (FCRA), a federal law that regulates the information credit reporting agencies can include. The FCRA establishes limits on how long negative information can be displayed.

The “Date of First Delinquency” (DOFD) is a key factor in determining the removal date for a collection account. The DOFD is the precise moment the original account first became delinquent and was never subsequently brought current. This date is not when the account was sent to collections, sold to a collection agency, or when collection efforts began. For instance, if a payment was missed in January and the account remained unpaid, January would be the DOFD, and the seven-year clock would begin from that point. Even if the debt is later paid, the collection account remains on the credit report for the full seven years from this initial delinquency date.

Beyond the Standard Reporting Period

While collection accounts adhere to a seven-year reporting period, other types of negative financial information can appear on a credit report with different durations. These items often stem from more severe financial distress and have specific rules regarding their presence on a consumer’s report.

Bankruptcies, for example, have a longer reporting lifespan than typical collection accounts. A Chapter 7 bankruptcy, which involves the liquidation of assets to pay debts, can remain on a credit report for up to 10 years from the filing date. In contrast, a Chapter 13 bankruptcy, which involves a repayment plan, is typically removed from a credit report seven years from the filing date.

Civil judgments, which are court orders to pay a debt, traditionally appeared on credit reports. However, due to policy changes implemented by the major credit bureaus around 2017-2018, these judgments are no longer included on consumer credit reports. This means that while a civil judgment remains a public record, it does not directly impact a consumer’s credit score through the major reporting agencies. Similarly, tax liens, which are government claims against property for unpaid taxes, are also no longer reported by the three major credit bureaus. This reporting practice ceased after 2018.

Disputing Collection Account Information

Consumers have a right to accurate information on their credit reports. The Fair Credit Reporting Act (FCRA) provides a mechanism for disputing inaccurate or incomplete items. If a collection account appears on a credit report with errors, such as an incorrect balance, an inaccurate Date of First Delinquency, or if it does not belong to the consumer, it can be disputed.

To initiate a dispute, a consumer can contact the credit reporting agency (Experian, Equifax, or TransUnion) directly, providing written details of the inaccuracy and supporting documentation. The credit bureau then has a timeframe, generally 30 days, to investigate the disputed information by contacting the furnisher of the data, such as the collection agency or original creditor. If the investigation finds that the information is inaccurate, incomplete, or cannot be verified by the furnisher, the credit reporting agency must remove or correct the entry. This process allows for the removal of erroneous collection accounts, potentially shortening their presence on a consumer’s credit history.