5 Undeniable Reasons People Hate Credit Reports

Did you know that each time you apply for a loan, the lender pulls out your credit report via a hard inquiry? And the hard inquiry stays on your credit report as “negative information” for about 24 months. Even applying for a credit card affects your credit score in a negative way. Plus, details of bankruptcy or a lawsuit that can stay for more than 7 years on your credit report. There are several more reasons why most people hate credit reports.

credit report

Here are the 6 undeniable reasons people hate credit reports

1) Student loan missed-payment information can stay on your credit report for 7 years

Missing a student loan payment can be more costly than you think. Your credit report is regulated by a federal law known as the “Fair Credit Reporting Act(FCRA)”. It is their job to make sure only the responsible one receive both federal student loans. To tighten the screws, they keep your missed payment(one or more) information for about 7 years from the date of the first missed payment.

2) Credit card delinquency information also stays for 7 years on your credit report

Delinquency, in general, is defined as a minor crime committed by someone misinformed or uninformed. You are wrong if you think you can get away by missing a couple of credit card payments. The information about your missed payment stays on your credit report for about 7 years.

3) Your credit report also registers a charge-off

A charge-off is debt write-off by the creditor or lender if they classify the borrower to be a delinquent and as a result, is incapable of repaying the money. Creditors write off the debt 6-8 months after not receiving a single payment. A write-off can offer short term relief to the borrower, but no one can get away with it. It stays on your credit report for 7 years.

4) A debt settlement is another negative item that stays on your credit report

A successful attempt at debt settlement may reduce the money you owe to the lender but the records stay on the credit report for 7 years from the date of settlement. Moreover, a debt settlement also affects the credit score of the debtor.

5) A foreclosure also lingers on your credit report

A foreclosure is a legal process in which the lender tries to recover money from a borrower who is unable to pay off the debt but had applied for the loan with collateral. The collateral is usually a real estate property. One you find yourself in such a situation, you won’t be able to borrow more money as the accounts will stay on credit report for 7 years from the first missed payment.

The bottom line

Credit reports are maintained by credit bureaus to benefit the lender, the borrower, and the federal government. You may not like to glance over your credit report but it is the only way a lender can verify your credibility.

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