Stale Credit? Can credit wilt if not used?

Can Credit become Stale?

Absolutely, its just like bread.  Might you have stale credit? If you don’t use it with time, it just becomes stale. The three credit reporting agencies look back to a consumer’s use of credit for approximately 7 years.  It can be more, but lets just keep it simple and say “7” years.  If you had negative credit accounts that are “over 7 years” old, including a car repo, they do become obsolete.  Once they become obsolete, then Equifax, Experian, and TransUnion are required under the Fair Credit Reporting Act to delete this information from your credit reports.  So, when you apply for a loan, they are prohibited from providing that negative information to third parties.

During those “7” years, if you have not applied for credit or used any type of credit, then the credit reporting agencies will represent that your credit report is “unavailable”.  What that usually means is that you have no information on your credit reports and your report has become stale. 

I have had cases where the client filed for a bankruptcy and never opened an account thereafter.  Eventually, even the bankruptcy information has to be deleted under the law.  I can only stress that in this country, you usually need credit.  This is especially true if you want to buy a house.  If you have no credit, then the lender’s will deny the loan or charge you a premium interest rate.  The higher the rate, the higher the monthly payment will be [for the same house].  

So, if in doubt, you can always order your credit reports by phone free of charge once a year.  This became law after the 2004 FACT ACT was passed.  As a consumer, you are entitled to a credit report from EACH provider.  The phone is a pre-recorded service which asks a few questions and takes about 3-5 minutes to complete.  Thereafter, your credit reports are sent regular mail.

The phone number is 1-877-322-8228.  If you see inaccurate or errors, please call my office as you may be entitled to compensation!  Our firm does not charge a fee unless we win your case and we always have a free consultation.