Real Estate Insights

Once you have found the derogatory/negative items on the credit report, the next step is to calculate the age of each account.

The negative items will expire after a certain period of time and then these items need to be deleted. If your credit report shows a derogatory item that has expired, contact the credit bureau(s) and ask them to remove the item.

Here are the guidelines for derogatory items expiration:

·         Late Payments - 30 to 180 day late payments - delete after 7 years.

·         Charge-off Accounts - delete after 7 years

·         Accounts placed with Collection agencies:

·         Accounts sent to collections - delete 7 years from the date of the original missed payment.

The account will be marked as "paid collection" on your credit report when you pay the full balance.

If you settle for a reduced amount, the collection agency will report the account as "paid for less than the total due" or "settled".

Try to get the collection agency to report the account as "Paid in full" or have them delete the item all together. You don't want your accounts to say "settled" or "paid collection".

Closed Accounts

If the account had delinquencies, they should be deleted 7 years from the date they were reported.

Bankruptcy - BK

Bankruptcies remain on your credit report for 10 years after the filing date. When you file bankruptcy, all accounts in the bankruptcy should be marked as "Included in BK" and the individual accounts should be deleted after 7 years.

Judgments

Most judgments (claims, civil and child support) should be deleted after 7 years from the filing date.

Tax Liens

City, county, state and federal tax liens can remain on your credit report indefinitely. Often the IRS places tax liens against you in error and even after you spent $ thousands on tax attorneys to prove to the government that the IRS or local taxing authorities were in error, the tax lien remains on your credit report as "settled" - implying that you admitted the derogatory item and paid/settled the account. You need to work hard to get the IRS to admit in official writing that the item was "submitted in error" and then contact the credit bureau(s) and have them remove the items.

Thus, after reviewing the negative items on your credit report and finding items that have expired, contact the credit bureaus and ask them to have the items deleted. This is an easy way to improve your credit score.