A frequent concern of individuals is "how long will a negative listing remain on my credit report?" The answer is seven years. With a bankruptcy or judgment it can stay on your report for up to ten years.

Most people feel like this is an undeserved prison sentence they have been given. During this time they can not move into a house or purchase a new car at a reasonable interest rate.

Seven years - why?

Is a one time mistake with your credit really worthy of a seven year punishment? Why should you have to pay the outrageous cost of having a bad credit report, especially when it was just a brief time in your life? Do all the months of paying on time not count for anything?

Why is seven years the magical number? Has it been discovered that people will not make mistakes or run into financial hardship after seven years?

No, there is no scientific reasoning behind the seven year mark. It is a completely random time limit.

Did you know that before the Fair Credit Reporting Act the credit bureaus had no time limit to how long a negative mark could remain on your credit report? In reality a negative mark remained on your credit report forever.

Finally, Congress placed a time limit on the bureaus. Please do not be confused that seven years is how long an item must remain on your credit. Seven years is the reporting maximum.

Another way of saying this is it is illegal for a negative notation to stay on your credit report for longer than seven years. Many people have had a negative notation erased long before seven years has run out.

Credit reporting is entirely voluntary. A creditor is not required to report an item for any length of time at all. In fact, creditors and collection agencies often remove credit report marks long before the seven year clock expires.

Creditors and collection agencies usually just need a little encouragement from a compelling dispute letter or a good credit repair attorney. Plus, the credit bureaus perform credit repair on your report at the seven year mark.

In a utopian society there would be no time limits on credit reporting. Instead, marks would remain as long as they truly reflected the applicant. Information found on a credit report would only provide accurate marks about the applicants' credit worthiness. Instead of being an excuse for a creditor to give you unreasonable interest rate or down payment.

The point is since we don't live in that world, why should we wait to repair our credit? Why shouldn't we take steps today to erase questionable and misleading information from our credit report? This way we don't have to pay the high cost of bad credit longer than we have to?