Many people want to know how long a negative notation will stay on their credit report. The answer to this is seven long years. If you have a bankruptcy or judgment the notation can stay on your report for up to ten years.

Most people feel like this is an undeserved prison sentence they have been given. During this time they can not move into a house or purchase a new car at a reasonable interest rate.

Why seven years?

Is one bad decision deserving of a seven year punishment? Why do you have to live with the high cost of bad credit? The choice probably came down to paying a bill or providing for your family if you want to call that a choice.

Why is seven years the magical number? Has it been discovered that people will not make mistakes or run into financial hardship after seven years?

No, there is no solid reasoning behind the seven year reporting limit. It is a whimsical time limit.

Before Congress enacted the Fair Credit Reporting Act (FCRA) in 1970 the credit bureaus were not limited whatsoever in how long they could report negative credit information. In fact, they could keep bad credit on your record forever!

Congress placed this time limit on the credit bureaus. Do not be mistaken and believe that a negative notation must remain on your credit report for seven years. That is the maximum not the minimum.

Another way of saying this is it is illegal for a negative notation to stay on your credit report for longer than seven years. Many people have had a negative notation erased long before seven years has run out.

Creditors and collection agencies are not required to report a listing. This is completely voluntary on behalf of the creditors and collection agencies. Furthermore creditors and collection agencies have often removed negative marks before the seven year limit.

Often creditors and collection agencies just need some encouragement from a good credit repair attorney or a compelling credit dispute letter. In addition, the credit bureaus themselves perform a form of credit repair at the seven year point.

In a perfect world there would be no arbitrary reporting limit. Instead, marks would remain as long as they bore the true characteristics of the applicant. Credit information would provide accurate indications of our credit worthiness and not just give the banker an excuse to jack up interest rates so they can earn a bigger profit.

The point is since we don't live in that world, why should we wait to repair our credit? Why shouldn't we take steps today to erase questionable and misleading information from our credit report? This way we don't have to pay the high cost of bad credit longer than we have to?