Adverse Credit Reporting Restrictions Under the FCRA

Adverse credit reporting restrictions under the Fair Credit Reporting Act put hard time limits on how long negative information can appear on your credit file, control who is allowed to pull that file, and give you the right to sue when those limits are ignored. Most derogatory items must come off after seven years. Bankruptcies get ten. Anyone who reports, furnishes, or uses the information outside those rules is exposed to statutory damages, actual damages, and attorney’s fees in federal court.

How Long Negative Items Can Stay on Your Report

The core reporting time limits sit in 15 U.S.C. § 1681c. A seven-year ceiling covers most adverse entries: late payments, charged-off debts, collection accounts, civil judgments, and records of arrest.¹ Criminal convictions are the exception. The statute lets them be reported with no time limit at all.

For collection accounts and charge-offs, the seven-year clock does not start when the account went to a collector. It starts 180 days after the first delinquency that led to the collection or charge-off.¹ That’s the fact debtors most often miss. Debts get sold and resold, and each new collector may try to re-age the entry. The original delinquency date is what controls, and a reset is itself a violation you can dispute.

Paid tax liens follow a different rule. The statute allows them to stay on your report for up to seven years from the date you paid, not from when the lien was filed.¹ In practice, the three major bureaus voluntarily stopped reporting tax liens in 2018 because of data quality problems, but the law still permits it.

Bankruptcy Gets a Longer Window

All bankruptcies — Chapter 7, 11, 12, and 13 — can legally remain on your credit report for ten years from the date the court entered the order for relief.¹ As a voluntary policy, the three major bureaus typically remove Chapter 13 filings after seven years, because Chapter 13 involves a repayment plan rather than a full discharge. That policy is not a legal requirement, and the bureaus can change it. If seven years pass and a Chapter 13 is still on your file, check the entry and dispute it if the bureau did not remove it on its own.

When the Time Limits Do Not Apply

The reporting windows have a large carve-out for high-value transactions. When any of the following are on the table, a bureau can report adverse items regardless of age, including old bankruptcies and long-since-closed collections:

A credit transaction with a principal amount of $150,000 or more
A life insurance policy with a face amount of $150,000 or more
Employment with an annual salary of $75,000 or more

Cross one of those thresholds and the seven- and ten-year limits stop applying.¹ Most people applying for a mortgage or a salaried professional job cross at least one, so the reporting ceilings offer less protection than the headline numbers suggest.

Where Medical Debt Currently Stands

Medical debt reporting has been unsettled. In early 2025 the Consumer Financial Protection Bureau finalized a rule that would have banned medical debt from credit reports entirely. A federal court vacated that rule in July 2025 after the agency agreed with plaintiffs that it exceeded its statutory authority.² There is no federal law right now that prohibits medical debt from appearing on consumer credit files.

The three major bureaus have voluntarily limited some medical debt reporting, including waiting periods before new medical collections appear and exclusions for certain small balances. Those are business policies, not legal protections, and the bureaus can revisit them.³ If a medical collection lands on your report and the underlying charge is wrong or should have been paid by insurance, you can still dispute it through the ordinary FCRA process.

Who Is Allowed to Pull Your Report

The FCRA also restricts access. A bureau can furnish your report only when the requester has a “permissible purpose” listed in 15 U.S.C. § 1681b. The main ones:

A lender making a credit decision, reviewing an existing account, or collecting a debt
An employer or prospective employer, only with your written consent
An insurer underwriting a policy
A government agency deciding eligibility for a license or benefit that requires considering financial status
A court with jurisdiction to compel disclosure
A business with a legitimate need tied to a transaction you started

A pull without a permissible purpose is a violation, and you can sue.⁴ A landlord who runs your credit with no pending rental application, or a marketer who pulls your file to build a prospect list, is breaking the law.

What Must Happen When You Are Denied

If a lender, insurer, or employer denies your application based even in part on your credit report, the law requires a formal adverse action notice.⁵

The notice must identify the credit bureau that supplied the report by name, address, and phone number, and it must state that the bureau did not make the decision and cannot explain the denial. If a credit score was used, the notice must include the score.⁶

You then have 60 days to request a free copy of the report that was used against you, separate from your regular annual free report.⁶ The notice must also tell you that you can dispute anything inaccurate. If you were denied credit and never received a proper notice, the company that denied you has already violated the FCRA.

Disputing an Item That Should Not Be There

Pull your reports from all three bureaus and identify the specific entries at issue: a debt past the seven-year mark, a payment marked late that you paid on time, an account that isn’t yours, or a collection with a re-aged delinquency date. Gather supporting documents. Bank statements, payment confirmations, court records, and discharge papers all make a dispute harder to brush off as frivolous.

You can file online through each bureau’s portal for instant confirmation, or send the dispute by certified mail with return receipt if you want a stronger paper trail for later litigation. Either way, keep copies of everything.

Once a bureau receives your dispute, it has 30 days to investigate. That window extends by up to 15 more days, for a maximum of 45, if you provide new relevant information during the original 30-day period.⁷ If the bureau cannot verify the item, it must delete it. You get written notice of the results and an updated report.

The furnisher — the bank, lender, or collector that sent the data — has parallel duties. When the bureau forwards your dispute, the furnisher must conduct its own investigation, review what you sent, and report back. If the data turns out to be wrong or incomplete, the furnisher has to correct it with every bureau it reports to, not just the one that received the dispute.⁸ A furnisher that rubber-stamps its old data without actually investigating has committed a separate FCRA violation.

When a Deleted Item Reappears

Sometimes a bureau removes an item after a dispute and then reinserts it because the furnisher reconfirms the data. When that happens, the bureau must send you written notice within five business days, identify the furnisher, and remind you that you can add a dispute statement to your file.⁷ A silent reinsertion is itself a violation. If an entry disappears after a dispute and reappears months later without any notice, the bureau has broken the law.

What You Can Recover When the Rules Are Broken

The FCRA has teeth. A bureau, furnisher, or user that violates the statute can be sued in federal court, and the type of violation drives what you can collect.

Willful Violations

For knowing or reckless violations, you can recover actual damages or statutory damages between $100 and $1,000 per violation, whichever is greater. Courts can add punitive damages, plus attorney’s fees and costs.⁹ The statutory floor matters. You don’t have to prove a specific dollar loss to recover something.

Negligent Violations

If the company should have complied but did not act willfully, you can recover actual damages plus attorney’s fees and costs.¹⁰ There is no statutory floor, so you need to document real harm: a denied mortgage, a lost job, emotional distress backed by evidence.

Filing Deadlines

You have to sue within two years of discovering the violation, or within five years of the violation itself, whichever comes first.¹¹ The discovery rule cuts both ways. If a bureau quietly reinserts a deleted item and you don’t check your report for 18 months, your clock starts when you actually find out. But waiting to check is never a strategy. The sooner you catch a violation, the easier it is to document harm and preserve your options.

1
Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports
2
Consumer Financial Protection Bureau. CFPB Finalizes Rule to Remove Medical Bills from Credit Reports
3
Medicare Rights Center. Federal Court Reverses Federal Medical Debt Protections
4
Office of the Law Revision Counsel. 15 USC 1681b – Permissible Purposes of Consumer Reports
5
Office of the Law Revision Counsel. 15 USC 1681m – Requirements on Users of Consumer Reports
6
Federal Trade Commission. Using Consumer Reports for Credit Decisions: What to Know About Adverse Action and Risk-Based Pricing Notices
7
Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy
8
Office of the Law Revision Counsel. 15 USC 1681s-2 – Responsibilities of Furnishers of Information to Consumer Reporting Agencies
9
Office of the Law Revision Counsel. 15 USC 1681n – Civil Liability for Willful Noncompliance
10
Office of the Law Revision Counsel. 15 USC 1681o – Civil Liability for Negligent Noncompliance
11
Federal Trade Commission. Fair Credit Reporting Act