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Free Credit History

By: EconomyWatch Date: 25 August 2009

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A free credit history is important because an individual may be refused a loan, insurance or even a credit card because of a negative incident in the past, even if s/he has an impeccable current credit status.

Before applying for any form of credit, you must review your credit history to:

evaluate your status
look for errors
assess the most-suitable options

Moreover, you are entitled to a free credit history copy from all three chief credit bureaus, under the federal law.

Free Credit History: Expiration of Information

The provision of free credit history report is governed by the Fair Credit Reporting Act (FCRA). It states that all credit and financial information (negative and positive) will remain on your credit history for a minimum of seven years.

This includes:

Delinquency information, such as late collections and payments.
Defaulted student loans, when repayments are not made for over 270 days.
Foreclosures.
Law suits and judgments, from the date of filing.
Paid tax liens.
Public records.
Charge-offs, plus additional 280 days from the date mentioned to the credit bureau(s).
Chapter 13 bankruptcy, wherein the individual agrees to pay a part of the debt.

Free Credit History: Special Cases

Though there is a mandate to report credit history information for seven years, there are certain exceptions to this rule. This includes:

Unpaid tax liens, for up to 15 years.
Criminal conviction(s) details, no time limitation.
Credit or insurance application worth more than $150,000, no specified reporting duration.
Job application for a position offering over $75,000, no time restraint.
Chapter 7 bankruptcy, wherein the individual sells all qualified assets to clear the loan rather than drawing-up a repayment plan. This stays on the record for at least 10 years.

Any inquiry made about your credit report, by you or by third parties, is recorded in the credit history and stay on your credit history for up to 2 years. Too many enquiries create a negative impression.

Even if you have faced a major financial crunch in the past, your credit history will improve significantly once the mandatory credit reporting period expires. In the meantime, you can take additional measures such as making timely payments and clearing debts to recover your credit score.