Having a few items on your credit report dragging down your score can be incredibly frustrating, especially if you have a good financial record.
A derogatory mark is a negative item on your credit report that can be fixed by removing it or building positive credit activity. Because derogatory marks can stay on your credit report typically seven to ten years, it’s important to know how to fix them.
Derogatory marks can affect your credit score, your ability to be approved for credit and the interest rates a lender offers you. Some derogatory marks are due to poor credit activity, such as a late payment. Or it could be an error that shouldn’t be on your report at all.
Here’s everything you need to know about derogatory marks and what you can do to fix them.
How Do Derogatory Marks Impact My Credit Score?
The amount that derogatory marks lower your credit score depends on the mark’s severity and how high your credit score was before the mark. For instance, bankruptcy has a greater impact on your credit score than a missed payment or debt settlement. And, unfortunately, having a derogatory mark impacts a high credit score more than it does a low credit score.
How long a derogatory mark stays on your credit report depends on the type of mark.
How Do I Get Derogatory Marks?
Derogatory marks show up on your credit report when a creditor reports a negative incident, though sometimes they’re on your credit report by mistake.
The marks might show up on all three reports from the major credit bureaus—Equifax, Experian and TransUnion—or on only some of them. Creditors aren’t obligated to report your payment history with the major bureaus, but many do.
How Long Do Derogatory Marks Stay on My Credit Report?
Derogatory marks usually stay on your credit report for around seven to ten years, depending on the type. After that period passes, the mark will roll off your report and you should start seeing a change in your credit score.
Here’s how long each derogatory mark stays on your credit report:
|Type of Derogatory Mark||What Is It?||How Long Does This Stay on a Credit Report?|
|Late payment||Late payments are payments made 30 days or more after the payment due date.||Typically, this can remain on your report for seven years from the date you made a late payment.|
|An account in collections or a charge-off||Creditors send your account to collections or charge them off if there’s been no payment for 180 days.||Typically, this can remain on your report for seven years from the date you made a late payment.|
|Tax lien||A tax lien is when the government claims you’ve neglected or failed to pay taxes on your property or financial assets.||Unpaid tax lien: Can remain on your report indefinitely.
Paid tax lien: Can remain on your report seven years from the date the lien was filed.
|Civil judgment||Civil judgments are a debt you owe through the court, such as if your landlord sued you over missed rent payments.||Unpaid civil judgment: Can remain on your report for seven years from when the judgment was filed, but can be renewed if left unpaid.
Paid civil judgment: Can remain on your report for seven years from when the judgment was filed.
|Debt settlement||Debt settlement is when you and your creditor agree that you will pay less than the full amount owed.||A typical time period is seven years, starting from when the debt was settled or the date of the first delinquent payment if there were missed payments.|
|Foreclosure||Foreclosure is when you fail to pay your mortgage and you forfeit the right to the property.||Typically, seven years from the foreclosure filing date.|
|Bankruptcy||Bankruptcy is a court proceeding to discharge your debt and sell your assets.||Can remain on your report for seven years for Chapter 13 bankruptcy. Chapter 7 bankruptcy can remain on your report for 10 years.|
|Repossession||A repossession is when your assets are seized, such as a vehicle that was used as collateral.||Can remain on your report for seven years from the first date of the missed payment.|
How Can I Improve My Credit Score with Derogatory Marks on My Credit Report?
If you have derogatory marks, you can improve your credit score by working to rebuild your credit. By boosting your credit score, you’re more likely to get approved for loans and credit cards.
Here’s how to improve your credit score based on the type of derogatory mark:
|Derogatory Mark||What to do to improve your credit score|
|Late payments||Pay off the full debt as soon as possible. If there are late fees, ask the creditor to drop the fee (they often do if it’s your first time being late).
Stay on top of your payments with other lenders to show that you’re responsible, reducing the impact of a late payment.
|An account in collections or a charge-off||Pay off the debt or negotiate a settlement where you pay less than the full amount owed. Making a payment doesn’t remove the negative mark from your report, but prevents you from being sued over the debt.|
|Tax lien||Pay the taxes you owe in full as soon as possible. Continue to make timely payments with any creditors and lenders.|
|Civil judgment||Pay off the judgment amount, ideally before it gets to court. Make other payments on time to limit the impact of the civil judgment on your credit score.|
|Debt settlement||Pay the full settled amount to prevent your account from going to collections or being charged off.|
|Foreclosure||Keep other credit and loans open and make timely payments to build up positive credit activity.|
|Bankruptcy||Rebuild your credit after bankruptcy with credit cards who cater to lower credit and credit builder loans. Make timely payments to reestablish that you’re a responsible borrower.|
|Repossessions||Continue to pay other bills on time and pay off any further debt to the creditor.|
You can also remove derogatory marks if they’re inaccurate or unfairly reported. By requesting your free credit report, you can look for mistakes and inaccuracies.
For example, check to see if a missed payment was inaccurately reported or if someone else’s account got mixed up with yours. You can remove these mistakes, giving your credit score a boost.
How Do I Remove Derogatory Marks from My Credit Report?
You can remove derogatory marks from your credit report by disputing inaccuracies with the credit bureaus. Here’s how:
1. Request and review your credit report
Look through both “closed” and “open” derogatory marks. Check to see if your personal information is correct and if the creditor reported payments and dates appropriately. Take note of any discrepancies.
2. Dispute derogatory marks
If you notice incorrect items, payments or dates you need to file a dispute with that credit bureau (and any bureau that lists the item on your report).
You can file a dispute through the credit bureau or have a professional assist you. It’s best to make disputes as soon as you notice them, ideally within 30 days of the incident. The credit bureaus must respond to you within 30-45 days.
3. Follow up on the dispute
You may have to provide more information or proof to refute something on your credit report. Be sure to respond to any inquiries by the specified time. Check your credit report afterward to make sure that the error is removed.
Removing a derogatory mark from your credit report helps to repair your credit. You’ll also want to improve your credit by doing things like lowering your credit utilization rate, upping the average age of your credit and making timely payments.
If you’re unable to remove a derogatory mark from your credit report, you’ll need to wait until it rolls off of your report, usually within seven to 10 years. In the meantime, work to rebuild your credit and improve your creditworthiness.
How Can I Get Help with Derogatory Marks?
You can remove derogatory marks from your credit report by yourself. However, getting help from a credit repair company can make the process easier and improve your chances of getting the negative mark removed.
Many consumers appreciate the professional help as it saves time, energy and resources. Contact us for a free credit report consultation. We’ll talk about your unique situation and the ways that we can help you.