How long does debt relief stay on your credit report?


Credit report form on a desk

Pursuing debt relief can be wise if you’re struggling to pay what you owe but it can impact your credit report.

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Taking advantage of what debt relief can offer is a smart plan when you’re struggling under the weight of your unpaid bills. These types of strategies can make it easier and more affordable to get your financial issues in check, which can be a lifesaver when you’re facing high-rate debt that you can no longer afford to pay. But this type of help can also come with a lingering downside: A negative impact on your credit report. 

That matters because your credit report is essentially your financial resume and is used by lenders, landlords and even some employers to assess your reliability. Any negative mark, including those left by debt relief programs, can influence your credit score and borrowing power for years on end. But while taking part in certain types of debt relief strategies will typically be reflected on your credit report, it’s not a permanent issue — and the impact typically diminishes over time. 

So, the big question for many people is: How long will that mark stick around? And, is it possible to remove that mark before it ages off? Below, we’ll explain what to know.

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How long does debt relief stay on your credit report?

The duration of debt relief on your credit report depends on the type of program you use. Here’s a general breakdown based on the types of debt relief available to you:

Debt forgiveness: When you settle a debt for less than the full amount owed, this information typically remains on your credit report for seven years from the date of the first missed payment that led to the settlement. The account will be marked as “settled,” “settled for less than the full amount,” or similar phrasing. While it’s better than having an unpaid collection account on your report, settled accounts still indicate that you didn’t fulfill the original obligation.

Bankruptcy: Chapter 7 bankruptcy stays on your credit report for up to 10 years from the filing date. Chapter 13 bankruptcy, which involves a repayment plan, generally remains for seven years. These are among the most severe negative marks on a credit report, though their impact does eventually lessen as you work to rebuild your credit.

Debt management: Enrolling in a debt management plan through a credit counseling agency generally isn’t directly reported to credit bureaus. However, creditors may add a notation that your account is being paid through a debt management plan, and closing credit accounts as part of the plan will affect your credit score. These notations and closed accounts can remain for up to seven years.

Debt consolidation: Taking out a loan to consolidate debts isn’t inherently negative for your credit. The loan itself will appear as new credit, but successfully paying down the consolidated debt can ultimately improve your score. The loan will remain on your report for up to 10 years as a closed account after it’s paid off.

Hardship programs: Many credit card companies offer temporary hardship arrangements with reduced payments or lower interest rates. These programs may be reported as “paying under a partial payment agreement” or similar language, which typically stays on your report for seven years from the original delinquency date.

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Can you remove debt relief from your credit report?

While debt relief entries won’t just disappear overnight, there are ways to improve your report and, in some cases, remove negative marks before they age off. Here’s how:

Pay in full after a settlement: If you’ve previously settled a debt but later find yourself in a better financial position, you could contact the original creditor about paying the difference between the settled amount and the original balance. That would update the report to show “paid in full” rather than “settled,” which looks better to future lenders.

Ask for a goodwill removal: For accounts that were in good standing before entering debt relief, you might write a goodwill letter to the creditor explaining the circumstances that led to your financial difficulty. While not always successful, some creditors may agree to remove negative notations if you have since established a history of on-time payments.

Dispute inaccuracies: You should also review your credit report carefully for any errors related to debt relief accounts. If you find inaccurate information — such as incorrect dates, amounts or account statuses — you can dispute these items with the credit bureaus. By law, information that cannot be verified must be removed.

The bottom line

Debt relief does stay on your credit report, but it’s not forever. Most negative marks related to debt relief remain for about seven years but they become less significant as time goes on. If you’re working to rebuild your credit, focus on maintaining positive financial behaviors — paying bills on time, reducing debt and monitoring your credit report for errors. Over time, you’ll see improvements, and eventually, those negative marks will drop off completely. The road to financial recovery may take time, but it’s certainly possible if you take the right steps.



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