How Long Do Installment Loans Stay on Credit Report?

An installment loan is a type of financing where a lender provides a principal sum of money to a borrower. In exchange, the borrower will pay back the amount in full plus a percentage of interest. These loans typically last anywhere from 12 to 72 months.

Influences on Installment Loan Credit Report

The length that the loan will appear on your credit report depends on whether or not you are currently making payments. If you have already paid off the entire loan in full, the account will stay on your credit report for ten years after the last activity. However, several other scenarios will induce a shorter time on your credit report.

Generally speaking, these situations apply to borrowers who were unable to make payment completely or promptly. For instance, your installment loan might go to a collections agency if there are consistently delinquent payments. Therefore, the loan will stay on your file for up to seven years since the last activity.

Drawbacks of an Installment Loan

Other possibilities include having an installment loan with late payments or one that is overdue. Both will remain in the credit report for up to seven years. They will also hurt your credit score because they are proof of missed payments and reflect a lack of reliability as a borrower.

Fortunately, minimizing the negative consequences of installment loans is relatively easy. All you have to do is make the monthly payments on time and in full. Consistent payments will demonstrate to lenders that you are financially secure in your lines of credit.

There are a couple of ways to set yourself up for success when it comes to paying back loans. Some useful strategies include signing up for an autopay feature and sticking to a prescribed budget. If possible, pay back the loan early, though you should make sure there are no penalties for doing so.


Vivaan Marsh is a professional writer, editor and an expert in personal finance. Her career as a professional writer stretch for over 11 years. One of her passions in life is to help everyday families with there financial problems, making their life a bit easier and explaining complicated topics in an easy way. Read more >

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