loan hurting my credit

by Laci
(Lubbock, Tx)

I had a loan 3 years ago that I had never paid off. The balance is $500. Is it hurting my credit tremendously

Comments for loan hurting my credit

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Nov 09, 2011

If the fact that you defaulted on the loan is being reported to the credit bureaus, then yes, the unpaid loan is harming your credit history and the negative information could affect your ability to obtain new credit at reasonable terms, to obtain adequate insurance, rent a nice place to live and even to qualify for a responsible job. However, the negative information can only be reported for six years, so eventually it will disappear from your credit histories.

The fact that the unpaid loan will fall off of your credit histories eventually does not mean that you won't continue to owe the debt and that the lender to whom you owe the money is not legally entitled to ask you to pay it. Also, as long as the loan goes unpaid, the amount that you owe will be ncreasing due to late fees, interest and possibly other charges.

You should also know that in Texas, the statute of limitations on a loan is 4 years and that period of time begins on the date that you first missed making a payment on the loan. During those 4 years the lender is entitled to sue you for the money you owe. Once the statute of limitations ends, the creditor (or a debt collector) can try to collect from you indefinitely but cannot sue you.

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