Understanding your Credit Report

What Are Derogatory Marks

Derogatory marks are negative items that hurt your credit score, including:

Late payments (30+ days overdue)
Collections (unpaid debts sent to a collection agency)
Charge-offs (creditor writes off your debt as a loss)
Bankruptcies (Ch. 7 stays for 10 years, Ch. 13 for 7 years)
Foreclosures & repossessions (remain for 7 years)
Tax liens (if unpaid, can linger for years)

These marks weigh heavily on your credit score, but their impact lessens over time—especially if you take steps to improve your credit habits.

How To Get Your Credit Reports

Before taking action, you need to review all three credit reports (Experian, Equifax, TransUnion).

Errors are common—one Federal Trade Commission (FTC) study found that 1 in 5 consumers had mistakes on their reports.

✅ How to Get Your Reports for Free:

Visit AnnualCreditReport.com (the only official site for free reports).

Under federal law, you’re entitled to a free credit report every 12 months from each bureau.

Some services (like Credit Karma) offer free credit monitoring, but always verify with official reports.

Disputing Inaccurate Information

Mistakes on credit reports are common. If you find discrepancies—such as incorrect account statuses, wrong payment dates, or missing payments—file a dispute immediately.

Steps to Dispute Errors:

Identify all inaccuracies in your reports. – Highlight every incorrect item.
Gather evidence (bank statements, payment confirmations, etc.).
Submit a dispute (online, by mail, or via phone) with supporting documents.
Wait 30–45 days for the credit bureau’s investigation.
Follow up if the error isn’t fixed, escalate with a Consumer Financial Protection Bureau (CFPB) complaint.

⚠️ Pro Tip:

If the investigation confirms an error, the derogatory mark should be removed.

If the creditor can’t verify the debt, they must remove it!

Negotiating with Creditors (If the Debt Is Legitimate)

If the derogatory mark is accurate but you believe it’s unfair (e.g., a one-time late payment due to an emergency), you can try:

Goodwill letter – Ask the creditor to remove it as a courtesy.
Pay-for-delete negotiation – Offer to pay in exchange for deletion (get this in writing first!).

When do Negative Items Fall Off

Most derogatory marks automatically disappear after 7 years, except:

Bankruptcies (7–10 years)
Unpaid tax liens (can stay indefinitely in some cases)

While waiting, focus on rebuilding your credit—negative items hurt less as they age.

How to Rebuild Your Credit After a Derogatory Mark

Pay all bills on time (set up autopay if needed).
Keep credit card balances low (below 30% utilization, ideally under 10%).
Become an authorized user on a trusted person’s credit card.
Apply for a secured credit card if you can’t get approved for traditional credit.
Avoid opening too many new accounts at once (hard inquiries hurt temporarily).

By staying consistent, your credit will gradually improve—even before the derogatory mark disappears.