Is "worst derogatory" part of forever history like age of account?

[GypsyGal]

In another thread, RobertEG wrote....

What he said apparently was a reminder that the cessation of derogs from your CR does not mean that other information on the account ceases to affect your credit scoring.

That is correct.  The aging of a delinquency or derog from inclusion in your CR, and thus in credit scoring, does not remove any other information on the account, such as its age, or payment history/derogs related to other reported items of information. 

Information they receive from your CR can theoretically extend back to day one on any account, except for specific items of information that have reached a certain CR exclusion date.

I am confused... Let's use this example... I have a credit card on which I have not been late in over 5 years... I have a 60 day late in June 2005 and the report states that the worst derogatory is 60 days late and the account has a red flag because of derogatory.

Am I correct that the 60 day late should drop off sometime around June 2012?

Will that notation drop off when the 60 day late drops off or will the notation remain on the account because it is part of the forever history of that card? 

Also, will the red flag go away when the 60 day late drops off or will it stay as part of the forever history of the card?

Thanks for any information to clarify this for me.

[MarineVietVet]

<Sigh> (The sigh is not directed at you)

Let me try and allay your concerns. First of all there is a difference between your credit "report' and your credit "file" Your credit report is what all of us normally think about, The CRTP (Credit Reporting Time Period) dictates how long negatives can remain showing in our credit report pulls. The information in our credit file does stay there forever but is not a concern with creditors except for a few exceptions. Creditors can look at all your file for 3 reasons:

(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

But; and this is a huge BUT I have never, never, never (did I say never?) seen anyone relay a story that they were denied credit because a lender went back beyond the normal limits of the CRTP to check their file. Never.

So once a negative is off your reports is is gone essentially forever. Period. Or should I say it can't legally be put back on.

Does any of this make sense or help?

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[chasmith]

So when the CRTP on the 60 day late is reached (7 to 7.5 years), that derogatory drops off, both as to the 60 day late and the "worst derogatory".  Once it drops off it no longer affects your FICO score because FICO scores are pulled from the CR at the time of calculation.

The score impact of a 60 day late dropping off is probably small because the negative impact "ages" and the score hit goes down over time, I've seen comments to the effect that a 60 day has almost no effect after two years but YMMV.  It WILL be visible to any lender, for example a mortgage lender doing manual underwriting and may still be a red flag in that way. 

[Anonymous]

I can only speak out of personal experience on this one.  We've received, several times now, copies of the CRs used for our mortgage apps, and watched as they have manually reviewed these reports.  For us, in every instance, they are looking at the same CR that we can pull ourselves.  Those old lates and baddies are not visible on the CR's they are pulling for our mortgages - and they have always been over the $150,000 threshold.