Does a creditor have to report your debt to the credit bureaus?
Creditors are not required to report your debts to the credit bureaus. Your creditors can decide whether to report your debts to all three major credit bureaus (Equifax, Experian, and TransUnion), to one or two of the credit bureaus, or not to report your debts to any of the credit bureaus. As a result, you may not see all of the debts that you owe or that you are making payments toward being reported on your credit reports.
If a creditor does choose to report your debt to a credit bureau, they are required to report accurate information. However, reporting errors can occur, which is why it is important to regularly monitor your credit reports. For more information on what types of errors to look out for and what to do if you discover a credit reporting error, check out our blog.
How long does negative information stay on your credit report?
Late payments, judgments, and collection accounts can remain on your credit report for 7 years. A Chapter 7 bankruptcy filing can be reported for 10 years. A Chapter 13 bankruptcy filing can be reported for 7 years.
Is negative information removed once a debt is paid in full?
Unfortunately, paying a debt in full will not erase the record of a late payment, the collection account, or a judgment entered. Once the debt is paid in full, your credit report should reflect that the balance is no longer owed and that the collection or judgment has been satisfied. But, the record of any late payment, collection account, or judgment entered would still remain on your credit report for 7 years.
What happens if a debt is settled?
If your creditor agrees to accept a balance less than the full balance that you owe to settle a debt, the account will still remain on your credit report for 7 years. Your credit report should reflect that there is no longer a balance owed. However, it is likely to also reflect that the debt was settled and not paid in full.
Is it possible to rebuild after credit challenges?
Even if there is negative information from the past on your credit report, you are able to take action to rebuild your credit score and overcome credit challenges. For more information on rebuilding credit, be sure to check out our blog post.
You can also reach Steve and Vee anytime at 804-FREEDOM for additional information.
