Credit-related mistakes can follow you link a stink you can’t wash off. Have an account go into collections, miss payments on your student loans, credit cards, mortgage, car loan, and that info can linger on your credit report for up to seven years, even if it’s just a fluke. This is particularly a problem with medical debt, where even someone with otherwise pristine credit is unable to pay a huge hospital bill. So why is seven years?
That was the question that Credit.com’s Gerri Detweiler looked into, only to find that most people in the consumer credit business have no idea why the Fair Credit Reporting Act [PDF] specifies a maximum of seven years. After all, why not five years or ten years — or why there aren’t a range of dates for different transgressions?
One person from Experian, on of the three major credit bureaus, suggested that the source might even be Biblical, pointing out that Chapter 15 of Deuteronomy mandates forgiveness of debts every seven years.
But she eventually found a Congressional staffer who was able to dig up some info on how the seven-year figure worked its way into the federal legislation.
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3 comments:
I had some quack of a local doctor try and chase me down for $20 for over 7 years by "renewing" the debt with a different collection agency every year. Didn't make a dent in my rating but made him look like a supreme d-bag.
When it was mortgage time, it was "suggested" I pay it off, my reply was, I had no intention of paying the quack and I could also shop for a mortgage elsewhere... I was approved.
When I questioned the 7 year rule, of course none of the collection agencies could answer, only stating it was a "new" debt, even though it was over 12 years old, but he was lying about the date when he filed it.
Mine is all negative,so that makes me a bottom feeder.Kudos to everyone who has the tenacity to remain on top.
Credit is not what people make it out to be! Threaten me who cares! You can't get blood out of a turnip! My credit rating does not exist! I pay for everything with cash! I will not go in debt for stupid crap! If you can't save up to get it you dont need it!
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