Does your credit score really improve after 7 years?

I have been told by many people that if you have something bad on your credit that after 7 years it disappears. Is this true? If so what exactly do they mean by that? Do you still owe the money and it just doesn't show up on your credit report as a bad mark or does it mean that everyone erases your debts after 7 years? I have always been confused by this theory and would just like a little clarification.

Answers:
Now for the rest of the story.

Lines of credit fall off 7-years after they are paid. Collections 7-years from the date of first delinquency. Judgments 7-years, bankruptcy's 10-years, child support, government backed student loans and tax liens not until they are paid. Inquiries 2-years.

This doe's not mean that you still do not owe the debts, it simply means that they no longer show on your credit report.

By the time 7-years has passed the statute of limitations will have passed and the collection agency's can not sue you. Collection accounts can not be re-aged. This is a trick that some collection agency's use and can be contested and removed from your credit bureau if they try it.
Doesnt anyone watch Suze Orman? Watch her on MSNBC. Shes awesome. Anyway, I think they do clear after 7 years. The thing is you cannot try to contact or pay them those 7 years. If you do, you start the 7 year frame all over again. For example, 5 years have gone by and you decide to start making payments on that loan you never paid, youre scr3wing yourself by trying unless you REALLY PAY it, because you have start all over again(for things to clear). Not everyone clears it after 7 years, all companies are different(depends what kind of loan).
Normally bad debts drop off your report after 7 years. the collection agency will still continue to call you, but it will not show on your report after 7 years.
well sort of more like after 7 years somethings are removed
it depends on what and who you owe but bad and good things
are deleted after 7 years leaving most people with a clean slate
I talk to some of my credit people and they said u have to pay it off, then it can stay on your credit report up to seven years..

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