The first step to buying a car is to get approved for an auto loan. Now, loan approval is easy for people with good credit scores. But what about people with bad credit scores? Do they have to suffer for making some mistakes in the past? Are they destined to be rejected by lenders?

The answer is no. Negative credit information does not stay on your credit report forever. After a set period of time, negative credit information is removed. Under the Fair Credit Reporting Act, there are different deadlines for different types of credit information.

Bankruptcy

1. Chapter 7 Bankruptcy – Information related to Chapter 7 bankruptcy remains on your credit report for ten years from the date you filed for bankruptcy.

2. Chapter 13 Bankruptcy – Chapter 13 bankruptcy lasts for seven years from the date of filing.

Late payments

To have a good credit score, you must pay all bills before the due date. If you haven’t paid your bills by the due date, the lender considers it a “late payment” and the information related to the “late payment” is visible for seven years.

tax links

If you haven’t paid your taxes, it will show up on your credit report indefinitely. Information related to tax links will be removed only when you pay them. After the balance is settled, the information may remain for seven years.

Other public records, such as paid judgments and unpaid judgments, can remain for seven years from the date they are filed.

collection account

A collection account is a loan that has been given to a debt collection agency. If you don’t make payments to the lender, he/she can sell or transfer your loan to a third party who now has the right to collect money from you. Such information may remain on your credit report for seven years from the account expiration date.

credit accounts

If you paid off the loan with regular payments, the information will remain on your credit report for ten years from the last date of account activity. However, if you have unpaid credit accounts, they can remain on your credit report for seven years from the account’s due date.

If you have any negative information on your credit report, it will be removed in a couple of years. Once the information is removed, your credit score will improve and lenders will offer you better interest rates.