How long does a repaid debt show on your credit report?

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Businessman working on tablet with CREDIT SCORE on a screen

If you need to apply for more credit, your record cannot show that you still owe money to the bank. Similarly, if you have missed payments or defaulted in the past, it will not make it easier for you to avail loans. This is why it is good to know how long these things will show on your credit record.

Lender records – the quickest to wipe off

Open debts are updated by lenders once a month. The moment you repay or settle a loan, the lender marks it off as satisfied or cleared, and your outstanding balance will go back to zero. This monthly record is kept to check if the payment was made on time as well as to see the new balance.

However, since they check this only once a month, it may take a few days or up to a few weeks from when they get the money to clear the record.

Defaulter records take six years to drop off

If you have defaulted, prepare to have that shown on your credit record for the next six years. Whether you settled the debt after just two years or you continued paying smaller settlements even after the six years were up, your credit record will be wiped clean six years after the default date. This is why the default date is so important.

Everything else – six years maximum

Six years from the settlement date, all your records will be cleared. Having payday loans on your record may not go down well, as they show that you were struggling. Do not get stressed if your record has an AP on it. The truth is, you were making low payments, so it should have actually been defaulted, but it wasn’t.