What you should know about your credit report.

Attorney Satterwhite has held classes on credit for past several years. One of the biggest misconceptions consumers have is the difference between the statute of limitations and the time a negative item can stay on their consumer credit report.

A statute of limitations is the deadline for filing a lawsuit. Most lawsuits MUST be filed within a certain amount of time. In general, once the statute of limitations on a case “runs out,” the legal claim is not valid any longer. The statute of limitations varies state to state and is governed by state law. Massachusetts has a statute of limitations of 6 years for typical contracts. If you make a payment after the statute of limitation runs, then you reset the clock. If an item is reporting on your credit report and the statute of limitations "runs", then the creditor may continue to report the negative item until the time-frame set under the Fair Credit Reporting Act "runs".

The Fair Credit Reporting Act is a federal law. The FCRA governs the time a negative item can remain on your credit report. For most types of accounts, the time-frame a negative account can remain on your credit report is seven years from the date of delinquency. However, bankruptcies and judgment may be reported for up to 10 years and tax liens may be reported for up to 15 years.

If you plan on purchasing a house or are looking to apply for a promotion or a new position, then you should review your credit report and utilize this knowledge when dealing with creditors and credit reporting agencies. Hiring an attorney to resolve disputes or to settle your debt should always be an option and can be more affordable than you think.