California residents and others who have poor marks on their credit reports may panic at the sight of them. However, it is important to know that they will almost all go away after seven years. The only exception is a Chapter 7 bankruptcy that falls off a credit report after a decade. If a person does file for bankruptcy, the impact is usually greatest for the first two years after filing before leveling off and declining afterward.

Late payments can be among the costliest mistakes a person can make for his or her credit score. The late payment remains on that person’s credit score for up to seven years, and payment history makes up 35 percent of a FICO score. However, it is still worthwhile to make that payment as soon as possible because letting it linger could result in an account being sold to a collection agency.

If an account is sold to a collection agency, it will appear on a credit report even if the balance is paid off. Furthermore, it will also show that the original creditor sold the balance to an outside party. Therefore, an individual will have two marks on his or her credit report. Accounts generally get sold to collectors if there is a late balance for 120 days or longer.

Individuals who are struggling to repay their debt may wish to consider filing for bankruptcy. Doing so may make it possible to put a stop to creditor phone calls or postpone a scheduled foreclosure. Creditors may also be unable to proceed with legal action or other collection actions. An attorney may explain other benefits of filing such as having debts discharged while retaining some or all property. Legal counsel may also show a debtor how to file for bankruptcy.