By George Reed on February 20th, 2018
As a rule, credit reports do not have errors. But one error can damage your credit score even if you regularly monitor your score with the help of apps. The example of such errors can be the inclusion of outdated debts. Luckily, one can remove outdated accounts from the credit report if the limit of credit reporting time’s up.
The Time Limit for Negative Data
The law allows credit bureaus to list negative information only for a definite amount of time. 7 years is the time list for the most negative data. Bankruptcy stays on credit report for a whole decade.
As a rule, you should repay old debts from the credit report when the time is out. Once scheduled by credit bureaus, negative credit reports should be removed from your credit report. If old accounts stay on your report anyway, take advantage of the dispute process to remove them.
Pay attention that credit reporting time limit concerns only negative information. The credit bureaus are not obliged to remove old accounts, which do not include negative data. The credit reporting time for these accounts depends on the bureaus’ reporting guidelines. For instance, if you repaid the debt and an account was closed with a good balance, it will not influence your credit report seven years later
Send a Dispute Letter to the Credit Bureau
This process is quite simple. Send a letter to the credit bureau to inform them, that you are disputing the outdated information. Send it via certified email and request return receipt to have the sending date and the receiver’s signature.
Your dispute will go without a hitch if the dates on your credit report indicate that the old account is removed. Sometimes the credit report can contain wrong delinquency date. In this case, you should send the evidence, that this date is inaccurate. It might happen if a collection agency gives debts another date when they report to the credit bureau. It is against the law and you can demand to have your account removed if the delinquency date was seven years ago or more.
In case of a dispute, the credit bureau is ought to do an investigation. It should check which business reported the account. If the business confirms, that the dispute is accurate, you will have the credit report updated. Thus, if the credit bureau does not correct the disputed error, you will have to make more steps to make your credit report clear.
In 2013 Julie Miller discovered errors in her credit file, which was Equifax’s mistake. Eventually, she won a case and a jury gave her $18.4 million in damages. That was the largest individual case on record at the time – here is more about this story.
Disputing with the Creditor
If the investigation by the credit bureau has shown that the account was within the credit reporting time limit, the next step is disputing with the issuer of your credit card (or other business, which provided with negative data). The dispute letter will be quite similar. You should state that the delinquency date on your credit report is inaccurate. If you have a real delinquency date, provide it.
As well as the credit bureaus, the business has to investigate and give a response to your dispute within thirty days and make your credit report updated.
Do not Mix the Statute of Limitations
Check whether you confuse the credit reporting time limit and the statute of limitations on debt. This is a widespread mistake, as both of them define how long businesses can take some action on delinquent accounts. The credit reporting time limits are quite similar for every type of debt (not including delinquency) no matter what state you live in.
On the other hand, the statute of limitations on debt is opposite to the credit reporting time limit. It shows how long a creditor can commence legal proceedings against you for a debt. This statute varies by debt type and by state.