Banking Category Banking: the easy, simple banking guide

How Long Does it Take for Your Credit to Clear After Debts Owed?

Accumulating debt can have deep negative implications to your credit report.

Having too much debt can lower your credit score. If you have outstanding debts on which you are behind, you can expect that information to stay on your report for up to seven years, according to the Fair Credit Reporting Act.

Seven Years

The Fair Credit Reporting Act outlines how long negative items on your credit report can be kept -- and therefore used against you. From the time you become delinquent, which is usually 180 days after last payment received, that info will stay for seven years. Other items also qualify to stay on your record for seven years, including civil suits and judgments, collection records and records of late payments.


If your debts are bad enough to require bankruptcy, consider the implications of your choice.

Having a bankruptcy on your file is a significant red flag to credit bureaus and this information will stay on your record for 10 years. If you file for Chapter 13 (reorganisation of assets), the credit bureau can take this off after seven years, but are not under any obligation.


The higher your debt level is, the worse your credit score will be.

If your credit report list your available credit at being, say, 60 per cent or 70 per cent consumed, your score will be affected. It is recommended to keep your debt level to no more than 30 per cent. So, for example, if your total available credit is £6,500, try to keep your debt to no more than £1,950. This factor makes up 30 per cent of your credit score. So once you clear off your debts, you are on the road to repairing your credit report.


If you have cleared your debts owed but still have a number of years to go until that negative information is cleared off, work hard to input as much positive information into your report as possible. For example, paying your bills on time accounts for 35 per cent of your credit score. So combined with keeping your debts low, you can work to improve your report, thus improving your score in a few years, allowing you to become a more preferred customer to lenders and credit card companies.