8 Steps to Rid Credit Report of Old Debt

No matter how heavy it feels, bad credit doesn't last forever.

Even if you made a total mess of your financial life at one point, after a certain amount of time, most of those financial mistakes will be expunged from your credit report.

For unpaid or delinquent accounts, the time period is seven years. For Chapter 7 bankruptcies, it's 10 years.

To prevent mistakes, credit bureaus often err on the side of removing bad information a little early, says Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association, a trade association for credit reporting companies.

For delinquencies, "most of the (bureaus) are set up to automatically delete the data at six years nine months, or somewhere around there," he says.

However, negative debts don't always disappear on schedule. Misunderstandings or errors can result in a debt overstaying its welcome on your credit report.

If old debt is still haunting your credit report, you don't have to live with it. Here are eight steps to get it off your credit report and out of your life.

One of the biggest factors in fighting old debt? Determining just how old it really is.

"If it's not falling off, then the credit reporting companies have not received the right date," says Maxine Sweet, vice president of public education for credit bureau Experian.

With a court action (like judgment or bankruptcy), determining the date is easy. You count it the day it was filed, says Evan Hendricks, author of "Credit Reports & Credit Scores: How the System Really Works, What You Can Do."

Delinquency is more difficult. "The regulatory language on it is very complicated," says Sweet. However, the date that you first became delinquent and after which never caught up is the date that should count, she says.

Her example: You miss a payment in January. Then you make it up and also pay in February. Then you miss March and your bill eventually goes into default. Your delinquency date: March.

In practice, divining a delinquency date can be "squishy," says Hendricks. Some creditors may let that string of nonpayments go for a couple of months before the account is tagged delinquent, he says.

One point that confuses even the experts: No matter how many times a debt is sold (and resold), the date that counts for the seven-year credit report clock is the date of delinquency with the original creditor, says Sweet.

Think of it as your debt's birth date.

If a collection agency bought your 10-year-old retail card debt and has started putting it on your credit report with a different date, that's a no-no.

"It used to be a really big problem for us," says Sweet. "Now it's the exception rather than the rule."

Your three credit reports from consumer reporting agencies Equifax, Experian and TransUnion are not identical triplets.

The old debt in question might be listed in some credit reports but not others. To find out, get a copy of all three of your reports, says Magnuson. Federal law entitles you to request a free copy of each report once every 12 months. You can download or send for them free at AnnualCreditReport.com.

Once you find out which bureaus are listing the debt, contact them. Your credit report will include contact information and dispute instructions.

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