If You Don't Pay a Bill, How Long Is It on Your Credit Report?

If You Don't Pay a Bill, How Long Is It on Your Credit Report?
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Your credit score is one of the main factors lenders use when deciding whether to make you a loan and how much interest to charge. Unlike good credit information, which remains on your report indefinitely, negative information -- such as a late payment on a bill -- doesn't hurt your score forever.

Length of Impact

Most negative information, such as late payments, defaults, collections and Chapter 13 bankruptcies, affects your credit score for seven years. Chapter 7 bankruptcies, on the other hand, remain on your report for 10 years. Tax liens remain on your report until seven years after you pay them off. If you don't pay off the tax liens, they don't ever come off your credit report.

Counting Time

The seven years for late payments remaining on your credit report starts at the original delinquency date, even if later negative information arises from the same incident. For example, say you didn't pay your credit card bill when a payment was due on January 1, 2013. If you missed the payment and eventually defaulted, the default would come off your credit score in 2020. However, if you paid it off and then had another, unrelated delinquency on that same card in 2015, the seven years would start counting all over.

Declining Importance

Even though your late payment stays on your credit report for seven years, its impact on your score doesn't stay constant. Instead, as the late payment is further and further in the past, it has a smaller and smaller impact on your score. As a result, even though your score might drop immediately after the late payment, it will start to recover long before the late payment falls off your score. In fact, according to Experian, your score can start to rebound a few months after the late payment.

Size Doesn't Matter

When you don't pay a bill, it doesn't matter how large the bill is -- at least to your credit report. Though a credit card company might not go through the expense and time to collect a judgment against you if you didn't pay a $20 charge, the missed payment and default look the same on your credit report as if it were a $2,000 default.