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Author: Sergei Lemberg
How Long Do Collections Stay on Your Credit Report?
In general, collection accounts remain on your credit report for a duration of 7 years.
In November 2021, a significant development occurred in the realm of consumer finance when the Consumer Financial Protection Bureau (CFPB) implemented new regulations, which included the introduction of explicit definitions for two crucial terms: “statute of limitations” and “time-barred debt.” These definitions aimed to clarify the rights and obligations of both debtors and debt collectors.
The “statute of limitations” is a fundamental legal concept that refers to the specific period established by the applicable laws within which a creditor or debt collector can initiate legal action against a debtor to collect a debt. Essentially, it sets a time limit for creditors to pursue legal remedies for unpaid debts. The duration of the statute of limitations varies depending on the type of debt and location. Once this defined period expires, the creditor loses the right to file a lawsuit against the debtor to collect the debt.
On the other hand, a “time-barred debt” pertains to a debt for which the statute of limitations has already expired. While the statute of limitations for a particular debt might vary, the debt itself remains valid and enforceable. However, once the statute of limitations expires, it acts as an absolute defense against debt collectors attempting to take legal action to recover the debt.
Many people wonder if the statute of limitations is relevant to their credit report and the answer is no. The statute of limitations is not applicable in this context. The Federal Fair Credit Reporting Act (FCRA) governs the actions of credit reporting agencies. According to the FCRA, a consumer reporting agency cannot include negative information on your credit report that is more than seven years old, or bankruptcies that are more than 10 years old.
About the author:
Sergei Lemberg is a consumer rights attorney, practicing since 2006, whose practice focuses on consumer law, class actions and personal injury litigation. He is known for a United States Supreme Court case (Facebook v. Duguid) defending consumers from autodialers under the Telephone Consumer Protection Act of 1991 to send unsolicited text messages. He is also the author of Defanging Debt Collectors, a book that teaches consumers how to battle debt collectors and win.
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