Does the 7-year limit start over after paying a debt?

Under the old Fair Credit Reporting Act (FCRA), credit bureaus would start the 7-year cycle over again when the consumer decided to pay off a negative account. This created a catch-22 since it provided little incentive to pay the debt.

Under the new FCRA, credit bureaus and creditors cannot arbitrarily choose when to start the cycle. In fact, the FCRA requires that the clock begin at the first negative remark that initiated the incident. For example, if you quit paying an account in March and miss all of your subsequent payments through October at which time the creditor sends the account to collections, the credit bureau would be required to begin its seven year period in March when you skipped your first payment.