Debts can take a long time to repay and can influence several other financial aspects. When you have an unpaid debt, it affects your credit score. Due to that, you can be less likely to obtain a loan. Not to mention that paying off debt can be a challenge on its own.

But for how long does debt impact our credit score? And what happens after it no longer has an impact? Here is all you need to know.


What happens to debt after seven years?

Seven years is generally the period of time after which a debt is no longer listed on your credit report, therefore it no longer negatively impacts your credit score. This applies to certain types of debt while others may stay on your credit report longer. 

Your credit report is a document that lists your credit, loans, and payment history with banks or other financial institutions. Most negative items will be automatically removed from your credit report seven years after the date of the missed payment. 

However, this removal does not erase the debt altogether. You will still need to pay off your debt even if it no longer appears on your credit report. The positive effect of a debt falling off your credit report is that it no longer lowers your credit score, which impacts your ability to take a loan. 


Which items fall off the credit report after seven years?

Not all negative items are removed from your credit report after seven years. Here are the ones that fall under this rule:

  • Late payments
  • Debt collections
  • Charged-off accounts
  • Chapter 13 bankruptcies
  • Money owed to or guaranteed by the government   
  • Foreclosures   
  • Short sales   
  • Collection accounts   


Which items can stay on the credit report longer than seven years?

Some types of debt can stay on your credit report longer than seven years and sometimes indefinitely. Here are the ones you should pay attention to:

  • Some judgments take seven years or until the state statute of limitations expires, whichever comes after
  • Unpaid taxes can stay on your credit report indefinitely or for seven years from the last date paid
  • Unpaid student loans have the same rule as unpaid taxes
  • Chapter 7 bankruptcies stay on your credit report for 10 years

In addition to these items, hard inquiries can stay on your credit report for two years. 

Being aware of which types of debt can stay on your credit report and for how long is useful if you are trying to improve your credit score. 

Furthermore, it’s important to note that only negative items fall off your credit report. Open positive accounts remain on your credit report indefinitely while accounts closed in good standing will remain for up to ten years.