Your credit score has a powerful impact on your life. You can expect your credit to be evaluated when you apply for loans, housing and credit cards. The lower your credit score is, the less likely you are to be approved.
Facts
If an item is marked as "derogatory" on your credit report, this means that the item has a negative impact on your credit score, causing it to drop. Some examples of derogatory items are bankruptcies, judgments and charge-offs.
Significance
If you are approved for credit or a loan with derogatory items on your credit report, you may be charged a higher interest rate than an individual without any derogatory entries.
Time Frame
According to the Fair Credit Reporting Act, most derogatory credit entries will be removed after seven years. The exception to this rule is a bankruptcy, which can appear on your credit report for up to 10 years.
Options
If a derogatory item is inaccurate, you may dispute the entry with both the creditor reporting it and the credit bureaus. This may eventually result in the item being removed.
Warning
Numerous inaccurate derogatory items on your credit report indicate that you may have been the victim of identity theft. This should be reported to the proper authorities immediately.
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