If You Don’t Pay a Bill, How Long is it on Your Credit Report?

Published on Dec 12, 2013 06:00 am

Like the old lament, “How can I miss you if you won’t go away?” unpaid bills are about as pleasant as a house guest overstaying his welcome. Utility, health care, phone and other bills from a financially challenged past also aren’t easily left behind. Accounts with delinquent payments stick around on your credit report for up to seven years. Exceptions are bankruptcies and unpaid tax liens, which can stay on your credit report for up to 10 and seven years, respectively.

Timing Is Everything

The seven-year clock starts ticking on the date the balance due became delinquent. At that point the bill’s status passes from overdue to delinquent, meaning the creditor that provided the product or service doesn’t believe you’ll pay it back unless stronger measures are taken.

To avoid this scenario, set up a payment plan well before the 180-day window has closed. If you contact the creditor after this time, acknowledge the bill, or make a partial payment, you risk re-setting the clock so the debt will remain on your credit report for seven years after that date. A legal or financial adviser can tell you how to proceed to avoid prolonging a negative listing on your report.

The Collection Calendar

The listing period for unpaid bills on your credit report is different from the time limit for the creditor to take legal action against you. Each state sets its own statute of limitations – the amount of time a creditor has to secure a court-ordered judgment against you or other measures, such as wage garnishment, to collect the debt. At the end of that period, ranging from a few to several years, the bill is classified as “time-barred.” Collection agencies or creditors might still contact you but have run out of time for legal remedies. Unpaid judgments remain on your credit report for seven years or until the state statute of limitations runs out, whichever is longer.

Knowledge Is Power

A proactive strategy starts with a review of your current status. Check your three bureau credit report to find out where you stand, reviewing bills on the reports for how much the bills are and for how long they show as being overdue. Armed with the details, you can form a plan to move forward. Fresh strategies may include updating or correcting inaccurate unpaid bill listings or researching the most effective way to handle accurately listed unpaid bills, whether that means setting up payment plans, providing letters of explanation, or allowing the listing to expire.

Forward Momentum

If you’re worried about unpaid bills on your credit report, there are resources to help you understand and carry out procedures best suited to your situation. To alleviate stress, take positive action towards gaining control of your finances and becoming debt free. Schedule a regular credit check to stay on top of developments, track progress and remind yourself of your worthy commitment to your financial future.

About the Author

Cyndi Perkins is an award-winning newspaper editor, columnist and reporter. Beginning her career in the 1980s, she has covered business, gardening, health, fitness, travel and parenting for international, national and regional publications.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from ConsumerInfo.com, Inc.  © 2013 ConsumerInfo.com, Inc.  All rights reserved.

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