How to See Derogatory Marks on Credit Report

Credit reports serve as a comprehensive record of an individual’s borrowing and repayment activities. These reports play a significant role in various financial decisions, influencing approvals for loans, credit cards, housing, and even some employment opportunities. While a credit report details positive financial behaviors, it also contains negative entries that can impact one’s financial standing. This article guides readers through locating and understanding these negative entries, commonly known as derogatory marks, on their credit report.

Understanding Derogatory Marks

Derogatory marks are unfavorable entries on a credit report, signaling a failure to meet financial obligations. They indicate a higher risk to potential lenders and can significantly lower a credit score.

Several common types of derogatory marks appear on credit reports. Late payments occur when a payment is made past its due date, often categorized by how many days past due (e.g., 30, 60, or 90+ days). Collection accounts arise when a debt is not paid to the original creditor and is subsequently sold or assigned to a third-party collection agency. A charge-off happens when a creditor determines an unpaid debt is unlikely to be collected and writes it off as a loss.

More severe derogatory marks include bankruptcies, legal proceedings for individuals or businesses unable to repay debts. Foreclosures represent the legal process where a lender repossesses a property due to missed mortgage payments. Repossessions occur when a lender takes back an asset, such as a vehicle, because the borrower defaulted on their loan. Civil judgments and tax liens also historically served as derogatory public records, indicating court-ordered financial obligations or unpaid taxes, though they are less common on current reports due to recent changes.

Obtaining Your Credit Report

Accessing your credit report is the first step toward identifying any derogatory marks. The most direct and federally authorized method to obtain a free copy of your credit report is through AnnualCreditReport.com. This website allows consumers to request one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Staggering these requests throughout the year can provide a continuous overview of your credit information.

Some credit card companies and financial institutions offer access to credit reports or scores as a benefit to their customers. However, these offerings might not always provide the full, comprehensive report from all three bureaus, often focusing on a single bureau or a simplified score.

When requesting your credit report, you will need to provide personal identifying information for verification purposes. This information commonly includes your full name, current and previous addresses, date of birth, and Social Security number. These details help ensure that only you can access your sensitive financial information, protecting against identity theft.

Identifying Derogatory Marks on Your Report

Once you have obtained your credit report, you can begin identifying derogatory marks by reviewing its various sections. Credit reports are organized into distinct categories such as account history, public records, and collection accounts. Each section provides specific insights into your financial obligations and payment behaviors.

Within the account history section, examine each reported account for indicators of late payments or other negative statuses. Look for payment status codes or notations showing delinquencies, such as “30 days late,” “60 days late,” “90 days late,” or “charged off.” Many reports display a payment history timeline, where late payments are visually represented by specific symbols or numbers indicating the severity of the delay. The date of last activity or last reported status for each account can also highlight recent issues.

Collection accounts are listed in a separate, dedicated section of the credit report. This section details information about the original creditor, the collection agency currently holding the debt, the original amount owed, and the date the account was placed for collection. The presence of an account in this section signifies that the original debt was not resolved and was subsequently transferred to a collections entity.

The public records section would contain information on bankruptcies, foreclosures, or civil judgments. While changes in reporting practices have made these less common on current reports, their appearance would indicate significant financial distress. Reviewing all sections of your credit report thoroughly ensures you identify every type of derogatory mark impacting your financial profile.

Addressing Inaccuracies on Your Credit Report

After identifying potential derogatory marks on your credit report, you should take action if you believe any information is inaccurate. The Fair Credit Reporting Act (FCRA) grants consumers the right to dispute inaccurate information with the credit bureaus. Initiating a dispute is a formal process that can be done online, by mail, or over the phone.

For documentation purposes, submitting disputes online or via certified mail is recommended. When filing a dispute, you should clearly state the specific account or entry disputed and the reason for inaccuracy. Including supporting documentation, such as payment receipts, canceled checks, or official letters, can strengthen your claim and expedite the investigation process.

Upon receiving a dispute, the credit bureau is required to investigate the disputed information within 30 to 45 days. During this period, they will contact the information provider, such as a lender or collection agency, to verify the accuracy of the reported data. Following the investigation, the credit bureau will notify you of the results and provide an updated credit report if changes were made.

You also have the option to contact the original creditor directly to dispute inaccurate information. Creditors have an obligation to report accurate data to the credit bureaus. Resolving the issue with the original creditor can lead to them updating or correcting the information reported, which will then be reflected on your credit report.