How Long Does a Garnishment Stay on Your Credit Report?

A garnishment is a legal process initiated by a creditor to collect an unpaid debt. It involves a court order or official notice compelling a third party, such as an employer or bank, to withhold funds directly from your wages or accounts and send them to the creditor. This typically follows a judgment against a debtor for obligations like unpaid taxes, child support, or defaulted loans. This article explains how garnishments relate to credit reports and how long such information remains visible.

Understanding Garnishment

Garnishment typically occurs after a court has issued a judgment in favor of the creditor, confirming the debt is owed. Common forms include wage garnishment, where a portion of an individual’s earnings is withheld directly from their paycheck, and bank garnishment, which involves freezing and seizing funds from a bank account.

While a court order is generally required for most garnishments, certain government entities, such as the Internal Revenue Service (IRS) for back taxes or the Department of Education for defaulted student loans, may initiate garnishment without a prior court judgment. The Consumer Credit Protection Act places limits on the amount of disposable earnings that can be garnished from wages, restricting it to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.

Garnishment and Your Credit Report

A garnishment itself, particularly a wage garnishment, does not directly appear as an item on your credit report in the same way a loan or credit card account would. The major credit bureaus (Experian, TransUnion, and Equifax) do not typically receive direct information from courts regarding wage garnishments. Therefore, you will not see a specific entry labeled “wage garnishment” on your credit report.

However, the underlying debt that led to the garnishment will almost certainly be reported, and this is where the impact on your credit report occurs. If the debt was an unpaid credit card, loan, or other obligation, its delinquency and subsequent collection efforts, including any judgment obtained by the creditor, will be noted. Creditors may add a notation to the delinquent account indicating that payments are being secured through wage garnishment, providing context to lenders reviewing your report. This means that while the garnishment itself isn’t a separate line item, the events leading up to it, such as missed payments and the judgment, are recorded and affect your credit standing.

Duration of Garnishment on Your Credit Report

The information related to a garnishment, primarily the underlying delinquent account and any associated civil judgment, remains on your credit report for a period of seven years. This duration is governed by the Fair Credit Reporting Act (FCRA), a federal law that regulates the information credit reporting agencies can include in consumer reports. For most negative items, including collection accounts and civil judgments, the FCRA dictates a seven-year reporting period.

The seven-year clock for delinquent accounts begins from the date of the original delinquency that led to the collection or charge-off. Even if the debt is paid off through garnishment, the public record of the judgment and the history of delinquency remain on your report for the full seven years from their respective trigger dates. While there have been changes regarding how civil judgments are reported by the major credit bureaus since 2017, the underlying delinquent account and its payment history still adhere to the seven-year rule. Paying off the garnished debt early does not remove the negative entry from your report sooner than the mandated seven-year period.

After Garnishment is Removed from Your Credit Report

Once the seven-year reporting period, as defined by the Fair Credit Reporting Act, concludes for the underlying delinquent account or civil judgment, that information should automatically be removed from your credit report. Credit reporting agencies are legally required to remove most negative items once their time limit expires. This means that the record of the debt that led to the garnishment, along with any associated public record of a judgment, will no longer be visible to lenders or other entities reviewing your credit file.

The absence of this negative information can contribute to an improvement in your credit profile over time, as older negative marks have less impact on credit scores. While the garnishment itself doesn’t appear directly, the removal of the delinquent account and judgment signifies that the past financial difficulty is no longer part of your active credit history. After removal, your credit report will reflect only the remaining items, which should ideally include positive payment history from other accounts, allowing for a clearer financial picture.