by Dana Coyle

Created on: December 06, 2008   Last Updated: December 07, 2008

What is a negative comment and just how long will it be part of my credit history? Knowing what is on your credit report and understanding how the credit reporting system works is extremely important to get a good credit score and keep it.

WHAT IS A NEGATIVE COMMENT?

An account status listed on your credit report as anything other than "Paid or Paying as Agreed", "Current", "Paid, Closed/Never Late" or "Closed/Never late" is most likely going to have a negative impact on your credit scores.

NOTE: "Credit Card Lost or Stolen/Never Late" does not hurt your scores.

The Fair Credit Reporting Act (FCRA) spells out what can be listed on a credit report and how long it can legally stay there. The three main credit bureaus, Experian, Equifax and TransUnion, are required by law to follow these guidelines.

NEGATIVE ITEMS ON CREDIT REPORTS

1) "Late Payments" can stay on your credit report for 7 years from the date the payment was missed. Typically, only payments that were 30 or more days late will show up on credit reports.

NOTE: Payment History is the largest factor in your FICO credit score.

2) "Charge-off" accounts can stay on your credit file for 7 years from the first late payment that led to the charge-off status. A charge-off means the company wrote the account off as uncollectable and listed it as bad debt for accounting purposes.

NOTE: Charged-off account balances are often sold to collection agencies and can show up on the credit report as another negative item for the same account.

3) "Collection" accounts, whether paid or unpaid, are always a negative item. They can stay on your credit report for 7 years from the date of the first delinquency with the original company that the account came from. For example, if a medical bill occurred in July 2002, it cannot be reported as a collection account on a credit report after July 2009.

NOTE: Collection agencies often list the date they bought the account as the "date opened" on credit reports, this can make the account appear newer than it actually is.

4) "Settled" accounts usually stay on credit reports for 7 years from the date paid. These are sometimes listed as "paid less than full amount owed".

5) "Repossession" accounts are typically listed on credit reports for 7 years from the date the repossession happened. Any late payments prior to that time should come off individually as they reach the seven year limit.

6) "Foreclosure" can stay on for 7 years from the date of occurrence, with associated late payments coming off at

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