Credit Reports are all about your credit history and information related to your loans and cards. There are details about when the loan was taken, how much is the loan, when you missed a payment, when you pre-paid a loan and so on. A common question that comes to mind is, till what time does each information stay on your report. A few questions that may arise in mind are:
- If I missed a payment a year back will it be there on my report?
- I applied for a loan about 6 months back, a hard inquiry for it was made by the bank, will it still be there in my report?
- If I settled a loan about three years back will it be there on my report?
All of you might have similar questions about your credit report, so let’s find out that till what time does any negative information stay on your report, well we are not so bothered about the positive information.
How Long Does Negative Information Stay on the Credit Report?
Credit reports have the different type of information that relates to your debt. Each type of information is treated differently when it comes to score calculation and the duration for which it stays on the report also varies. Below we discuss the duration for which different information stays on your CIR:
- Missed and Delayed Payments:
Accounts information section of your credit report contains information about the repayment history of your debt including various loans and credit cards. Repayment history is the most important aspect when it comes to credit score calculation; this section contains payment details of all loans and credit card dues for last 36 months apart from all the other details about loans and cards. So if you missed a personal loan or a home loan EMI it will continue to reflect in the report for 3 years and every time your report is pulled in the meantime it will be reflected in it. Of course, recent defaults impact the score calculation more than older defaults but the older defaults (up to 36 months) do stay in the CIR.
- Settled Loans
Settled status for a loan is one of the worst things to have in your credit report and what’s more is that it stays on your report for seven years. When you pay all your loan dues diligently than the loan status is shown as “closed”. However, when you do not pay the whole amount that you owe to the lender but pay an amount less than what is owed to the lender then the loan status is shown as “settled”. A settled loan always raises red flags for future lenders as they are not sure if you can be trusted to repay your dues in full. A settled loan will show in your report for seven years which is a pretty long time; getting fresh credit with a settled account status could be difficult so think carefully before you decide to settle a loan. Of course, a loan that is settled more recently than a loan that was settled years back is viewed more negatively but the impact of a settled loan may be influenced by other factors on your credit report too.
- Credit Enquiries
When you apply for a loan, the first thing the prospective lender does is seek the applicant’s credit report; this is known as a hard inquiry and is reported in the CIR. Each hard inquiry impacts the credit rating and lowers it. However, if you decide to check your own score then it has no impact on the credit score. It is recommended that you get a free CIBIL Report or a credit report from other bureaus once in a while to assess your credit health. Hard inquiries stay on the report for a period of 24 months but only enquiries made in the last 12 months impact the score calculation, after that even though they will feature in the report they will not impact the rating.
So now there is more reason for you to be careful with your debt. Irresponsible treatment of debt could remain in your report for the duration ranging from 2 years to 7 years as discussed above and could impact your chances of getting fresh debt.