Bad credit reports and how they affect your rating over time

When you fail to repay instalments on your loans, this can affect your credit score for varying periods. Essentially, such reports are called derogatory marks, and they are important because they are essentially what causes a bad credit rating. We’ll go over various things that can give you a derogatory mark on your credit rating, and for how long these affect your credit score.

Bankruptcies

While bankruptcies are serious, even missed payments can have a very negative effect on your credit score. It doesn’t usually matter if you are a few days in default, but if you miss your payments for a month, and if that advances to payments that are two or three months late, this can affect your score for the next seven years.

Medical defaults and closed accounts

If you’ve been defaulting on your debts in an account for a considerable period of time, the lender may then sell off the accumulated debt and interest to an organisation called a Collection Agency, which will then try to recover the debts from you. Another aspect of this, not completely unrelated, is when you incur debt in relation to medical expenses. 

Generally speaking, medical debt does not leave a derogatory mark so long as it is within a six months period. However, if you exceed that six months period, medical institutions generally sell off such debts to the Collection Agency and it counts as a derogatory mark on your score.

Other factors that may affect your credit score include student loan default, foreclosure, tax lien, hard inquiries, and so on. If you have to deal with any of these, reach out to our team. We’ll be glad to provide you with professional assistance. 

Read the full version of the original article here: https://consumerattorneys.com/article/how-long-do-derogatory-marks-stay-on-your-credit

Also your can read more about:

• How to Correct a Deceased Indicator on Your Credit Report

• Why the Credit Bureaus Confuse Information Between Consumers

• Credit reporting errors strike victims when they least expect it