Debt Collector to Reduce Time Debts are Reported on Your Credit Report

credit report time lengthEncore Capital Group, one of the largest debt collectors in the country, has made a surprising announcement. Debts in default will no longer be reported for the industry-standard seven years, but instead will only be reported for two years.

The change applies to all companies owned by Encore, which include Midland Credit Management, Midland Funding, Asset Acceptance, and Atlantic Credit & Finance.

Accounts will also be removed once they are paid or settled. The change is effective immediately, says Encore.

Credit reporting is one of the most common forms of debt collection, according to many court decisions.

Midland’s press release is here: Encore Capital Group Enhances Credit Reporting Policy to Help Consumers

How Long Do Things Typically Stay on a Credit Report?

If you run into financial troubles that result in negative entries on your credit report, these can affect your score for years but the time length varies by type of issue. A bankruptcy, for example, can remain on credit reports for up to ten years. However, if no other negative information hits your credit report, the score will gradually recover even during the ten years. Negative entries do less weight in credit scoring formulas as they get older.

As far as how long each negative item will remain on your credit report, that varies. The Fair Credit Reporting Act (FCRA) outlines your rights with regards to credit reporting, credit reporting agencies (TransUnion, Experian, and Equifax), and creditors. The FCRA also explains the limits on how long different types of negative entries can remain on your credit report, though some of these limits vary by state law.

Remember, you have the right to a free credit report each year at annualcreditreport.com. It is important to regularly monitor your credit report as negative entries can greatly affect your ability to obtain credit or the best interest rates. If there are items on your credit report that are not yours or should no longer be reported, contact us to see if we may be able to help. Culik Law has sued numerous creditors and the credit reporting agencies on behalf of consumers for FCRA violations.

Josef Culik

Josef Culik

Attorney Joe Culik has built his reputation on helping people and has dedicated his practice in Boston, Massachusetts to consumer protection, employee rights, and small business and franchise law.