Your credit report can affect your life in many ways. A lender may check your credit before loan approval; a landlord may check credit prior to entering a lease; and some employers view your credit as a part of the hiring process. Because an accurate report is important, it's beneficial to know what items you can expunge from your credit report.
The Fair Credit Reporting Act (FCRA) is the federal law that governs consumer rights as they pertain to credit reports. Passed in 1970, the law grants specific rights to consumers and places certain restrictions upon credit bureaus. Under the FCRA, credit bureaus are not allowed to place erroneous data on a credit report. One of your rights as a consumer is to access your report and file a dispute with the bureau if the report contains false or inaccurate information.
What's Included and for How Long?
Credit bureaus include credit account information on a credit report. This includes personal information and both positive and negative account history. Under the FCRA, negative account information can remain on a report for up to only seven years. If you have an account showing on your report that is older than seven years, you have the right to file a dispute with the credit bureau to have that item removed. The bureau then has 30 days to investigate the dispute and make changes.
Time Limit Exceptions
Most negative account data is limited to a seven year appearance on a credit report under the FCRA. There are, however, certain exceptions. Chapter 7 and Chapter 11 bankruptcies can remain on a credit report for up to 10 years. Non-discharged and dismissed Chapter 12 and Chapter 13 bankruptcies can also remain for up to 10 years. Unpaid tax liens can remain for up to 10 years in California and indefinitely in all other states. Paid judgments in California can remain for up to five years.
If you have an incorrect or outdated item on your report, there are three ways to file your dispute. First, you can visit the bureau's website and file a dispute online. The online dispute form allows you to specify the item you're disputing and why. Second, you can file a dispute over the phone by speaking to a customer service representative. Third, you can file a dispute through the mail. A mailed dispute should not only list the items you're disputing and the reason for each dispute, but include any necessary supporting documentation.
Credit repair companies often promise to remove items from your report and improve your credit score. According to the Federal Trade Commission, this can be a scam. Not only do such companies charge fees for their service, but the tactics used by some of these companies may be ineffective or worse, illegal. Although credit bureaus are required to remove errors, they are not required under the FCRA to remove accurate account information that falls within the FCRA statute of limitations, even if that information is negative.
- Epic: The Fair Credit Reporting Act And The Privacy Of Your Credit Report
- Federal Trade Commission: Credit Repair
- MyFico: What's In Your Credit Report
- Federal Trade Commission. "A Summary of Your Rights Under the Fair Credit Reporting Act," Pages 1-3. Accessed Oct. 29, 2020.
- Federal Trade Commission. "Free Credit Reports." Accessed Oct. 29, 2020.
- Federal Trade Commission. "Credit Reports Are Now Free, Every Week." Accessed Oct. 29. 2020.
- Consumer Financial Protection Bureau. "If a Credit Reporting Error Is Corrected, How Long Will It Take Before I Find Out the Results?" Accessed Oct. 29, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act," Page 70. Accessed Oct. 29, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act," Page 52. Accessed Oct. 29, 2020.
- Federal Trade Commission. "Consumer Reports: What Information Furnishers Need to Know." Accessed Oct. 29, 2020.
- Federal Reserve. "Credit Reports and Credit Scores," Page 1214. Accessed Oct. 29, 2020.
- Federal Trade Commission. "Disputing Errors on Credit Reports." Accessed Oct. 29, 2020.
Mack Mitzsheva is a tax lawyer, personal finance expert and the author of the forthcoming ebook, "10 Best Places to Work Online." Mitzsheva is also a social media entrepreneur with five successful sites under her belt. Always innovative, Mitzsheva is currently developing a cutting-edge budgeting app for newlyweds.