Confirming when a negative account will drop off

[EW800]

Hello,  

I know in general a positive account remains on credit reports for ten years and a negative account will like remain on for about seven years.  How about in the case of say an account with one 30-day late.  Would the account drop off after about 7 years or after 7 years would it turn positive and remain for another 3 years or so?  

Thanks!  

[Anonymous]

That's right. If it wasn't charged off, the late will drop and if there is nothing else negative, it'll indicate as a positive account.

[RobertEG]

FCRA 605(a) only requires the CRA to exclude the adverse items when they reach their exclusion periods.

Monthly delinquencies are excluded at 7 years, not the entire account.

[EW800]

Thanks for the responses!  I am pleased to hear that they turn positive and remain on the reports a bit longer.  

I was mainly asking in regard to one account that has one 30-day late from several years ago, but I also have one credit card settlement and a foreclosure.  At seven years will these accounts turn positive and remain until the ten year mark or will they drop off the report at seven years-ish?  

Thanks again!

[Anonymous]

Depends - by settlement do you mean it was charged off, then paid, or you reached a settlement on the balance, then the card remained open?

YMMV, but I believe it all relates to whether an account, once derogatory, ever becomes current again.  If an account never got back into good standing then there's nothing 'positive' to return to.  I believe forclosure would count as the latter.

One thing you can do is check your credit reports from annualcreditreport.com. These reports contain info you can't see on the std consumer reports, including soft pulls, derogatory dates and estimated removal dates or dates the account will be considered in good standing again.  If you don't see messages, then it's likely it'll turn positive and just the bad stuff will drop off.

[RobertEG]

That is a question that I have always considered to be unclear under FCRA 605(a).

First, I exclude collections, as they are not accounts of the consumer.  FCRA 605(a)(4) clearly identifies collections as an adverse item that becomes excluded in its entirely after 7 years plus 180 days from the DOFD on the OC account.

Derogs on an OC account, other than a charge-off, all have specific exclusion dates under FCRA 605(a) based on the type of adverse item.

For example, monthly delinquencies become excluded no later than 7 years from their individual dates of occurence, and any judgment is excluded by thte CRAs after 7 years from the date of the judgment.  Exclusion only related to the adverse item, and not to the entire account. 

However, charge-offs are not as clear.  The exact wording of FCRA 605(a)(4) is:

"Accounts placed for collection or charged to profit and loss which antedate the report by more than ......."

The speciifc period is then clarified in section 605(c) to be 7 years plus 180 days from DOFD.

That implies that the entire account becomes excluded, not just the charge-off.

The logic of that exclusion, and whether the CRAs actually exclude the entire account, is a bit of a mystery to me, as I have never had a charge-off.

I am curious as to the experience of others here on the site.

When a charge-off reaches its exclusion date, does the CRA then rountinely exclude the entire OC account from the consumer's credit report, or does it ony exclude any continued reference to the charge-off, but continue to include the account itself, absent the CO?

The statue is simply not clear.......