Derogatory marks on your credit report are negative items that can affect your credit score. These may include a variety of items such as late payments, bankruptcies, or accounts in collections.
Generally, derogatory marks mean that you failed to repay a loan or other form of credit as agreed. Potential lenders use your credit reports to learn how you’ve handled credit in the past, and derogatory marks may show them that you’ve had difficulties repaying other loans or paying on time. Derogatory marks may lower your credit score, depending on the type of derogatory mark and how long it’s been on your report.
It’s important to understand the impact that different types of negative events can have on your scores, as well as how long each item will remain on your report. Here’s a quick look at the impact of various derogatory marks on your credit reports.
What Types of Derogatory Marks Can Affect My Credit?
Some of the most common derogatory marks that may appear on a credit report include:
- Late payments
- Accounts in collections
- Debt settlement
How Do Derogatory Marks Show up on My Credit Reports?
Credit bureaus use two main methods for getting information about your credit experiences. First, a creditor might supply your information to the bureaus. Many lenders and credit card companies submit information to the bureaus when a payment is more than 30 days past due, for example.
The second way credit bureaus access negative information about your credit history is by adding public records to your report. For example, bankruptcies are included in public records, and credit bureaus can add this information to your report.
How Long Will Derogatory Marks Remain on My Credit Report?
Most derogatory marks remain on your report for seven years. Some will remain on your report for 10 years or longer.
However, after a derogatory mark has been on your credit report for about two years, your credit will usually start to recover—as long as you are using credit responsibly.
How Will Derogatory Marks Influence My Credit Score?
Different negative items can have varying effects on your credit. For example, a late payment is a minor derogatory mark, and may not lower your score a lot. A foreclosure is a major derogatory item and may have a greater effect on your score.
In some cases, you may be able to get a minor derogatory mark removed. For instance, if you have a history of on-time payments and you miss one payment, consider contacting your creditor. After catching up on your payments and discussing your payment history, the creditor may be willing to have the derogatory mark removed.
If you have more than one derogatory mark on your credit report, even if the marks are for minor offenses, they may affect your score more significantly.
What if the Derogatory Marks Are Errors?
It’s not unusual to find errors on a credit report. If your report includes derogatory marks, be sure to review them and verify them. If you believe a derogatory item has appeared on your credit report in error, you can dispute the error with the credit bureau and try to get it removed or changed. If you are a ScoreSense member, you can use the ScoreSense Dispute Center to learn how to dispute inaccurate items with the three bureaus.
By keeping an eye on your credit scores and reports, you’ll be able to see whenever a derogatory item appears, and you can work to remedy the situation and keep track of how your credit may be affected. ScoreSense makes it easy to keep track of your credit scores and gives you information on all the factors that influence them. Start tracking your credit scores today with a free 7-day trial.