This is a summary of the provisions of the Fair Credit Reporting Act (FCRA) as it relates to how long negative (derogatory) information may be reported by any creditor to a CRA, and thus affect credit scores.
(Source: www.cardreport.com/credit-problems/time/html)
Making payments or partial payments on bad debts does not effect the running of the credit reporting time limits, except in the case of tax liens and federal student loans. All other types of items should expire on schedule, based on the original dates, regardless of when or whether they are paid. There was previously a great deal of confusion over the starting point, which could have been interpreted as the date of the last activity on the account. This resulted in the possibility of "re-setting the clock" on an old bad debt by making a payment on it, or by paper-shuffling on the part of collection agencies. The issue was clarified in the 1996 amendments to the FCRA, which set a specific starting date that is now SET BY LAW as the last deliqency date, and not later dates, such as a DOLP.
FCRA Section 605:
(c) Running of reporting period.
(1) In general. The 7-year period referred to in paragraphs (4) and (6) ** of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.
Inquiries - Two years. However, while inquiries may continue to report under the FCRA for up to two years, the FICO scoring model does not include them in scoring calculations after one year.
Late Payments - Seven years from the month in which the late payment was due. If there are multiple late payments in one account item, then they will each expire individually.
Charge-Offs - Seven years. The time runs from the date of the delinquency, plus 180 days. For example, if a payment was due on an account on January 1, 2001, but the debtor defaulted, and never caught up to become current again, and the account is eventually declared a charge-off by the creditor, then the seven year reporting time limit starts running on July 1, 2001, with the item scheduled to expire from his/her credit reports on July 1, 2008.
Collection Accounts - Seven years. The running of this time limit is the same as with charge-offs. The date of delinquency still refers to the original delinquency with the original creditor, regardless of when the collection agency began calling for payment of the debt. Collection agencies cannot legally "re-set the clock." FCRA 605.c.1.
Lawsuits And Judgements - Seven years or until the governing statute of limitations has expired, whichever is longer.
Bankruptcy - The FCRA permits a CRA to continue to report all bankrupties for ten years from the date of entry of the order for relief or the date of adjudication. Chapter 7 (liquidation) bankruptcies remain for 10 years. Chapter 13 (payment plan) bankruptcies may be deleted by some CRAs after 7 years, but it is at their discretion.
Paid Tax Liens - Seven years from the date of payment of the lien.
Unpaid Tax Liens - Forever (unless paid, then 7 years from lien payment)
Unpaid Federal Student Loans - Forever (unless paid, after which they can appear for seven years.)
Exceptions:
The above time limits apply to credit reports which would be available to creditors for most types of credit applications. However, the credit bureaus are legally permitted to disclose older information in the following situations:
A credit application involving a principle loan amount of $150,000 or more.
An application for a life insurance policy with a payout of $150,000 or more.
An application for employment in a position paying $75,000 per year or more.
