Your financial well-being can take a huge hit if there is negative information on your credit report. It may disqualify you from being approved for a home mortgage or a car loan, or result in your interest rates soaring.
In some cases, it may even prevent you from getting the job you really want. As a result, you are likely going to want to have any negative information taken off of your credit report as soon as the limit for that particular debt is reached.
The question is – what is that time limit? How long is that negative information going to stay on your credit report? There are two important timelines for any debt, which include:
- The credit reporting time limit
- The statute of limitations
The Statute of Limitations
This is a limited amount of time that a creditor or debt collector has to file a lawsuit to collect an outstanding debt. It protects consumers from being sued for an older debt that they have. The amount of time will vary from one state to another. In Florida, the statute of limitations is four years on any oral contract and five years on written ones. In most cases, the clock begins when the first payments is missed from the original creditor. However, if you make a payment toward the debt at any time, then the limitation period may “restart.” Many debt collectors will convince debtors to make a small payment in order to have the debt re-aged and add an additional five years to the limitations time period.
The Credit Reporting Time Limit
This refers to the amount of time that a debt collector or creditor has to report any information regarding a delinquent account on your credit report. In the majority of situations, the consumer reporting agency is not going to report negative information that is more than seven years old, or any bankruptcies that are over a decade old. All of the negative information will remain on the report for a period of seven years. During this period of time, you should pay special attention to what is listed on the report.
There are some people who confuse the credit reporting time limit and the statute of limitations. They make the assumption that once the four to five year statute of limitations has passed, the information about the delinquent account will be taken off their credit report. However, this doesn’t have any bearing on your report. Instead, it is credit reporting time, which is for a period of seven years that determines how long an adverse mark can remain on your credit report.
As a result, even if the statute of limitations is reached and the debt has expired, there still may be negative information on your credit report for several years. After the reporting limitation is reached, this information should disappear.
If you need more help understanding these laws and time periods, then it is best to hire a bankruptcy attorney in Florida. Contact the attorneys at the Badgley Law Group by calling 407-781-0420 to learn more.