This investigation divulged that derogatory information may remain on the credit report as follows:
- Criminal convictions can remain in the consumer credit report forever.
- Information reported for an application of a job with a salary of $75,000 of more can remain in the consumer credit report forever.
- Information that is reported for an application of credit or life insurance of $150,000 or more can remain in the consumer credit report forever.
- Information that is reported about a lawsuit or an unpaid judgment against you can remain in the consumer credit report for seven years or until the statue of limitations runs out, which ever is longer.
- Request for Credit Inquiries can remain in the consumer credit report for two years.
- Negative payment history information can remain in the consumer credit report for seven years after last activity.
- Bankruptcy can remain in the consumer credit report for ten years from the discharge date.
We found that the wording contained in the Fair Credit Reporting Act (FCRA) was specific towards deletion of "obsolete" derogatory information. The FCRA clearly states that the information "must" be removed when the time frame expires, whereas negative or derogatory information is consistently treated with the word "may", not "must", giving way to consumer's ability to request deletion of derogatory items contained in the credit report.
Despite the clear legislative mandate that the credit bureaus remove obsolete derogatory information from the credit report after the elapsed time period, we encountered numerous instances where items were not removed. Derogatory credit history remained after the elapsed time primarily:
- Due to credit bureau inadvertence or;
- Where the date used to establish the reporting duration was inaccurately reported.
Where a credit reporting bureau failed to delete a derogatory item and the last reported date indicated it should in fact be deleted, upon notification by the consumer to the credit reporting bureau the items seem to be immediately removed from the credit file with no resistance.
In cases where the derogatory last activity date used to establish the reporting duration is inaccurately reported, the items were not removed if the subscriber (collector or creditor) verified the reported last activity date (even if it was inaccurate) and that last activity date falls within the permitted time frame.
