Frequently Asked Questions
Bankruptcy, Foreclosure, Inquiry, Judgment, Lien, Repossession, Debt Settlement
How long do items remain on my credit report? Negative items will remain on your credit report for 7 years from the last date of activity. Positive items can benefit you for 10 years or longer if they are still active. Bankruptcies generally remain on file for 10 years.
What can I do to reduce the interest rates on my credit cards? Credit card issuers will generally grant small reductions in your interest rate if you show financial strength and ask for a reduction (See Strategies to Reduce Interest).
How can I stop receiving credit card solicitations? You can request a halt to solicitations by dialing (888) 5-OPT-OUT. This number registers your request with all three main credit bureaus. This may reduce the number of solicitations you receive.
Do I need a credit report monitoring service? Probably not. These services typically cost $12 to $13 per month and do not in themselves prevent identity theft or other fraudulent activity. They do notify you of any changes to your credit profile. If you suspect that you may become a victim, you may place a fraud alert with the credit bureaus for free. Some states also offer a credit freeze at a cost of $10 per credit bureau.
Does credit counseling hurt my credit? Credit counseling will never hurt your credit. Furthermore, if you are financially distressed and need a debt management plan, your credit score almost always improves as you complete repayment. See this article (Does Credit Counseling Hurt my Credit?) for a closer look.
Legal process where a debtor is deemed insolvent and unable to pay their financial obligations. Chapter 7, or liquidation allows for the debtor to be absolved of all eligible debts while assets are sold to partially repay creditors. Chapter 13 allows for the debtor to retain assets while paying a portion of their debt over a period of time. See bankruptcy basics for a more detailed look at the common types of bankruptcy and the impact on your credit.
Lender reclaiming real estate property due to default of a mortgage loan. The debtor loses any equity in the property. The lender typically auctions the property to satisfy the outstanding debt. See the steps to foreclosure for a closer look at this process.
Record of entities that have requested a copy of your credit report. These appear on your credit report for up to 2 years. Different types of inquiries may or may not affect your credit scores. See inquiries for a detailed look at the impact on your credit scores.
Decision by a court, in this case on an outstanding debt. A judgment is a public record that will appear on a credit report. This indicates that a judge ruled in favor of the creditor. See judgments for a detailed look at this legal process.
Legal claim to property due to outstanding debt. A lien may be placed on an asset to prevent the sale of that asset without the approval of the lien holder. A tax lien is a claim by the government on property owned by a debtor with an outstanding tax bill. More information on liens is available.
Seizure of secured asset due to default on a loan. Any equity in the collateral property that is seized is forfeited by the debtor. The asset is typically sold to satisfy the debt. Most repossessions do not fully cover the outstanding debt, and the debtor continues to be responsible for the remainder. See repossession for additional help.
A reduced payment made on an outstanding debt to cancel that debt in full. The payment is a compromise between a debtor and creditor made to resolve a defaulted debt. Debt settlement can have a negative credit impact. It can be used to occasionally avert legal processes. See debt settlement for an in depth look at how the process works.