Okay, no one ever said life was fair. But, I fail to understand the reasoning as to why a bad account stays on your credit file for (at least) seven years from the "date of last activity".
For example, say you had an account that fell into collections in 2000; you would think it would fall off your credit report in 2007. But, say you took untill 2007 to pay the darned thing off. Now, the "date of last activity" on the account is 2007, so now the account will stay on your credit report as a negative for another 7 years...untill 2014. That's a total of 14 years for one negative account!
How is this fair to the consumer? That's 14 years to have a lower credit score, credit denials, higher interest rates, constantly having to explain the account should you apply for credit, etc.
Why don't bad accounts just fall off after having first been reported as a negative? Why is the date of last activity so important? Where's the incentive to actually pay the bill?
2006-09-17
18:33:28
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9 answers
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asked by
WhyAskWhy
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in
Credit