A Common Misconception About Your Credit Report That Could Change Everything

You've heard it a hundred times. Your parents probably believed it, your mortgage broker, even your financial advisor. At one point or another, this common misconception about your credit report is that your accounts will only stay on your report for up to 7 years. But is this always true?

You'd be surprised to know that there are instances where some of your credit accounts are going to stay on your report for much longer than seven years. Sometimes up to twenty years! But what are these circumstances? When can you expect a credit account to lurk on your credit report for two decades?

What TransUnion Says:

A If an account is paid and does not contain any adverse information, the account will remain on your file for twenty (20) years from the last date of activity. This information assists creditors to understand the type of credit you have managed successfully in the past. If you have paid an account that was not paid in agreement with the contract with the lender, this account will report for six (6) years from the date you first became delinquent on the account.

To put it simply: good information may stick around for up to twenty years, while bad information should disappear after six.

The Bottom Line

If your credit report shows an account that has been closed and paid off, there is no need for concern. In fact, it's likely benefiting your score. Potential lenders will love to see how much of a credit rockstar you were back then.

However, if you find an account older than six years containing negative information on your credit report, take action. You will need to file a dispute with the credit bureau that issued your report. The good news is that these disputes are oftentimes painless and effective!.

Did you know that credit accounts can linger on your credit report for this long? Let us know in the comments!