How long does a late payment stay on my credit report? Questions like this and others related to the consequences of negative information on your credit report are some of the most frequently asked questions on the blog and on Equifax.com. Here are the answers to some of these questions, and in the coming weeks we’ll answer more of them for you.
Q: How will a loan forbearance plan affect my credit score?
A: Because your credit score is based on the elements contained within your credit file, any impact a payment plan might have on your credit score is dependent on your overall credit history. You should obtain a free copy of your credit reports from the three nationwide credit reporting agencies (CRAs) at annualcreditreport.com or directly from any of the CRA websites. You will be given the opportunity to purchase your score after you’ve received your free annual credit report. Once you have validated the accuracy of the information contained in your credit report, you can also add a consumer statement explaining the issues surrounding the forbearance plan.
Q: If an account is closed with no activity, how can there be recent activity posted on the credit summary?
A: There can be recent activity reported on an inactive closed account if the creditor recently reported activity such as changing the report date or the date of last activity of the account, etc. You should contact the creditor to determine what changed on the inactive account.
Q: How can I dispute credit score changes?
A: Your credit score is determined based on information within your credit file. You can dispute any inaccuracies on your credit report at any time by visiting http://www.equifax.com/dispute. You can also dispute inaccuracies by mail or phone. You will need to dispute inaccuracies on your credit reports with each CRA individually. You can also add a consumer statement explaining the issues surrounding the credit score change.
Q: If the original creditor is no longer reporting past due accounts, why can a collection agency continue to report negative information on my credit report?
A: A collection agency that purchased a debt from a creditor can continue to report the information within the guidelines for up to seven years from the date of the last activity (DLA). For example, if the original creditor charged the balance off to bad debt in 2005 and subsequently sold the debt to a collection agency, the DLA would be seven years from 2005. You can contact the creditor directly if you have specific questions regarding information it is reporting.
Q: Is there a way to remove a collection item by paying off the debt? Why pay the debt if it’s going to stay on your credit report?
A: As a general rule it is always better to pay off debt, even if it is charged off or in collections. While there is no way to remove the collection for seven years, creditors will often report the debt as paid — it is often viewed more positively.
Q: If I choose to stop paying a revolving line of credit, how long will the unpaid debt remain on my credit report?
A: Most accounts will stay on your credit report for seven years. However, you should make sure that you settle the account properly with your creditor. Stopping payment on your account may have a negative effect on your credit score.
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