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Reporting Time on Your Credit Report; Debt, Collections and Judgments

There is often confusion about whether paying on old debts will keep them on your credit report for a longer period of time. Concern about doing further damage to your credit report can prevent people from paying off debts and moving forward financially. There are two time frames to keep in mind when dealing with unpaid debt and knowing what they are can mean the difference between paying off debt and living years with negative accounts on your credit report.

Two time factors impacting debt repayment:

  • How long the item can remain on the report
  • How long a creditor or collection agency has to sue you over the debt (statute of limitations)

Under the Fair Credit Reporting Act, most debts can only be reported on your credit report for seven years and 180 days from the date the account became permanently past due (unpaid).  There are no exceptions in the law that allow for keeping the debt on the credit report longer (see note below). Making a payment on the debt or talking to the collection agency or creditor about payments will not restart the time. The debt being sold does not restart the time either.

This is a completely different story when thinking about how long a creditor or collection agency has to sue you over a debt. This is called the statute of limitations and it varies from state-to-state. In general, making a payment or discussing the debt with the collection agency or creditor can restart the amount of time they have to sue you over a debt.

For example, you owe ABC Collection Agency $1,000. The statute of limitations to sue in your state (hypothetically) is six years.  The original debt was with A Local Hospital and went past due on January 2007. The creditor or collector would have until January 2013 to take you to court over the debt.

However, let’s say you make a payment on the debt in June of 2010; you may have just extended the time they may sue you until June 2016. In both situations the account will come off of your credit report in June 2014.

If you are successfully sued a creditor has additional options to enforce payment of the debt. These include garnishing wages, freezing bank accounts and in some cases placing liens against property.

Navigating credit, debt and credit reports can be challenging. It is not always easy to figure out your options and make the best decision for your finances. A certified credit counselor can help you put together a plan for getting out of debt and achieving financial freedom. Call the number at the top of your screen today.


Bankruptcies, judgments and some public records may stay on your credit report for up to 10 years

Published Apr 16, 2012.