What Does “Derogatory” Mean on Credit Reports?

The word “derogatory” refers to negative information on a credit report. A derogatory credit notation may impact the ability to get new credit or increased credit because it might indicate a higher credit risk to lenders.1 The phrase “key derogatory” indicates information that has a more severe negative impact on credit.2 A derogatory remark may stay on credit reports for seven years or longer.3

Common reasons for a derogatory credit remark include collection accounts, bankruptcy, foreclosure, tax liens and civil judgments.4

Negative credit information and derogatory remarks on credit reports may prevent being approved for credit, or result in higher rates or less favorable borrowing terms.

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“Derogatory” vs. “Delinquent”

A derogatory remark is different from a notation that says “delinquent.” Derogatory usually refers to negative information that’s been on credit reports for more than 180 days, while delinquent refers to negative account information of less than 180 days.4

Resources:

1. http://www.experian.com/blogs/ask-experian/2012/01/18/what-derogatory-means/

2. http://help.equifax.com/app/answers/detail/a_id/170/~/derogatory-information-on-your-credit-file

3. http://www.creditkarma.com/article/what-is-a-derogatory-mark

4. http://www.experian.com/blogs/ask-experian/2013/10/09/the-meaning-of-key-derogatory-as-a-credit-score-factor/

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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