How long does a collection stay on a persons credit report?

Question

My fiance and I got in a little disagreement a little while ago about how long collections stay on a credit report. 

He says that after 7 years they will be removed from a persons credit report - whether they are paid or not.

I disagree with that. Why would collection agencies just "give up" trying to collect money from a person and take it off a persons credit report. It doesn't make sense to me. If collection agencies just stopped trying to collect from a person after 7 years wouldn't a lot of people not pay their bills because it will just go away after 7 years?

Can someone clarify this for me? Thanks!

YSIC · Accepted Answer

I'd be glad to clarify! 
Collections stay on your credit report 7 years after the date of last activity. Don't let this confuse you...normally 7 years after date of last activity means the date that it was sold to the collection agency. Usually your account must be 180 days past due in order for the company to do that. Basically, I'm saying that the collection stays on your report 7 years and 6 months. After that, it will fall off your report.
Now, to get to your question, the collectors don't just give up and stop trying to collect the debt. Legally, they are still entitled to their money since they were not paid as agreed. They can attempt to collect that debt forever, if need be. You're right. Many people would just wait out the 7 years and start all over if that was the case. Cheaper than bankruptcy, no?! But that debt will follow someone until it is settled or paid.

Anonymous · Answer

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RE :How long does a collection stay on a persons credit report?
My fiance and I got in a little disagreement a little while ago about how long collections stay on a credit report.

He says that after 7 years they will be removed from a persons credit report - whether they are paid or not.

I disagree with that. Why would collection agencies just "give up" trying to collect money from a person and take it off a persons credit report. It doesn't make sense to me. If collection agencies just stopped trying to collect from a person after 7 years wouldn't a lot of people not pay their bills because it will just go away after 7 years?

Can someone clarify this for me? Thanks!
5 following 10 answers

D A · Answer

Disputing a debt does not restart a clock.  Doesn't matter if an old debt that's minus 7+years now shows an "updated" date.  Clock still starts from last date of payment, which will be indicated on your credit report.  So ignore the "udpdated date."  As for collecting past 7+years when your debt legally falls off the credit report, that is a violation of the federal collection act.  Bottom feeder collection agencies will buy these for pennies on a hundred bucks.  If they harass you or repost on your credit report, contact a consumer protection lawyer (it's free) and they will sue the snot out of the bottom feeders.  You usually end up with a hundred bucks, too.  Trust me, there's a lot of collection agencies that do illegal things all of the time until you sue them and put an end to it.

wizjp · Answer

Just because it is not on your credit report does not mean the debit has gone away. It means for most practical debits, they have been charged off as bad debits and taken off the lenders taxes; but that does not mean they won't still collect.

Some collections stay a lot longer. IRS liens, state tax and owner's association dues can stay or be renewed in some states for up to 20 or 30 years.

Anonymous · Answer

There's a trick if you want to get an auto loan or a business account. I have done this twice; even had a bankruptcy.  You dispute everything with the 3 credit agencies, then wait about a 3 weeks and go in for the loan or account while it's under dispute. The law states that a bank cannot turn you down for financial services while it's under dispute, so you get the loan or account.  I have been told twice by my credit union in years past that they see the negative collection on my credit history, but since it's being disputed, we'll give you the auto loan. You win, butt heads lose.

jubilee · Answer

Please see Studly's answer for all the technical answers. As for your question as to why a company would do this, is basically between their hands being tied to report it (which makes people who want to save their credit), SOL (which now takes their right to sue away), they're left with basically just harassing you and hoping you don't know how it all works and pay anyway. From a business standpoint, If I paid $200 to get this account from the original creditor, Plus the $500 over the last 7 years to pay someone to call you (wages, electricity, paper for bills, etc), I am now $700 into an $1,000.00 account you owe. Is it worth me as a company to potentially pay another $500 to chase you another 7 years (now totaling $1,200) for a $1000 account? No. Even if I get you to pay in half that time I'm in $950 and would only make $50 (not a lot of profit). Now the flip side. That time I had someone calling you I could have spent having them call on an active account or one worth $10,000 instead. Now that account is inacctive by the time I give up on you and now have the same delimma with the 2nd account. Now times that by how many accounts a day a rep can do, and then times that  by how many reps I have. I can be out hundreds of thousands of dollars yearly easily chasing your puny $1000 you won't pay. It simply isn't worth my time. Basically it's if I borrowed a $100 from you. Sure I owe  you and you want to be paid back, but if I moved away, would you spend hours of your time, your money, and your energy to track me down every day/month for the next 10-20 years? Or would you simply be pissed and chalk it up to a learning experience and move on? Most people move on or "give up" as you put it. They don't give up, it's simply no worth persuing past the 7 year point.

How long does a collection stay on a persons credit report?

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