Why 7 is a Magic Number When it Comes to Credit

Legend states that humans replace every cell of their body in seven year’s time. While that’s not entirely true there is one aspect of our lives that can be refreshed after seven years: our credit. That’s because of how most debt and payment infractions fall off of our credit reports over time.

The seven-year rule

In most cases outstanding debts, late payments, and other credit missteps are removed from your report after seven years. However there are a few exceptions to this including (ironically) chapter 7 bankruptcy, which takes 10 years to clear from your record as well as government debts and a few other exceptions that depend on the state. While this can seem like an eternity, the seven-year rule does offer some relief for people who may have made a mistake in the past but have since corrected their finances.

The impact to your credit score

Contrary to popular belief even one late payment can affect your credit score —  sinking it by up to 100 points in some cases. Luckily its impact will reduce over time leading up to its seven-year departure date from your report. Of course the amount of time your late payment looms over your credit score will also depend on how late it was. A payment that was late by 30 days might stop stinging after only a couple of years while a payment that was over 90 days late could hurt your score up until that seven-year mark. Depending on the severity of the infraction, chances are it might not actually be affecting your score anymore even though you can still see this blemish on your record.

Re-aging debts

Like with other parts of your credit report there is always the chance that errors can be made. For example an issue that complicates the seven-year rule is what’s called re-aging debts. This refers to the seven-year timeline resetting as a delinquent debt changes hands. Although the practice of buying and selling debts is both legal and very common, the seven years should start from when the debt first became delinquent with the original creditor. If you notice that the date of a debt has changed and is hanging around on your report longer than it should you’ll want to file a dispute with the reporting credit agency.

Reviewing your report

Before you can make corrections to your report and ensure that your old debts or other negative elements are removed on time you’ll first have to see the report for yourself. While there are many sites that will sell you your Experian,  TransUnion, and Equifax reports, AnnualCreditReport.com allows you to receive and review each of your reports for free once a year. Other popular resources include CreditKarma.com, which will give you an idea of how your TransUnion and Equifax scores look.  It also doesn’t hurt to familiarize yourself with the Fair Credit Reporting Act (FCRA) so you know what rights are afforded to you when it comes to your credit.


Many of us make mistakes in our lives that can greatly affect our future. This is especially true when it comes to personal finance and dealing with the monetary hardships that life can sometimes throw at us. If you’ve made credit mistakes in the past, there is hope thanks to the seven-year rule for credit reporting. Knowing your credit scores, the contents of your credit reports, and your rights under the FCRA can help you to repair your scores as your head towards that seven-year goal line.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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