What does 'Derogatory Mark' mean on a credit report?

The short answer

A derogatory mark is a negative item on your credit report that signals you failed to pay a debt as agreed, and it can seriously hurt your credit score.

What counts as a derogatory mark?

Several types of negative events can appear as derogatory marks:

  • Collections — an unpaid debt that was sent to a collection agency
  • Late payments — payments made 30 or more days past the due date
  • Charge-offs — a creditor gave up trying to collect and wrote off the debt as a loss
  • Bankruptcy — a legal filing to discharge or restructure your debts
  • Foreclosure — a lender took back your home because of missed mortgage payments
  • Repossession — a lender took back a vehicle or other financed property
  • Tax liens — the government placed a claim on your property for unpaid taxes

How long do they stay?

Most derogatory marks stay on your credit report for 7 years from the date of the original missed payment. Bankruptcies can stay for up to 10 years. After that, they fall off automatically.

How to fix it

You have a few options depending on the situation:

  • Dispute errors — if the mark is inaccurate, file a dispute with the credit bureau (Equifax, Experian, or TransUnion) and they must investigate within 30 days
  • Request a goodwill deletion — if you’ve since paid the debt, write to the creditor and ask them to remove it as a courtesy
  • Negotiate a pay-for-delete — offer to pay an outstanding balance in exchange for the creditor removing the mark from your report
  • Wait it out — the impact of derogatory marks fades over time, even before they officially drop off

When should you worry?

  • You don’t recognize the debt — this could be a sign of identity theft or a reporting error, so dispute it immediately
  • You’re applying for a loan or mortgage soon — derogatory marks can lead to higher interest rates or outright denials, so address them before you apply
  • The mark is past its expiration date — if it has been more than 7 years (or 10 for bankruptcy) and it is still showing, file a dispute to have it removed