1. Bad Things You Don’t Want to See in Your Credit Report
Did you know that the information contained in your credit report can open or close opportunities for
you? In this article, let’s discuss bad remarks that you’d never want to see in your credit report:
1. Charge-offs. Charge offs are debts that have been unpaid for so long that creditors have given
up collecting them. But don’t think that it’s a good way to escape from your payment
obligations. Debts that have been charged-off will be indicated in your credit report and can
instantly drive away potential lenders when you apply for new accounts. It could stay in your
report for seven years.
2. Debt collections. When a borrower defaults from payment, a creditor can assign the collection
of the account to a separate agency. Debts passed on to a debt collection agency will also be
reflected in your report. Needless to say, the fact that you have defaulted from your debts can
send out a negative impression to a potential lender.
3. Bankruptcy. A borrower may resort to bankruptcy in extreme situations. Although it is a legal
option which could discharge a person from debts and liabilities, it is still a derogatory remark
that will remain in your credit report for seven to ten years. If you have filed for bankruptcy, you
should work on rebuilding your credit immediately after your debts have been discharged.
4. Foreclosure. If you are in the middle of your payment, missing your monthly payment can lead
to foreclosure. This process is when the creditor takes over your property, put it on sale and use
the proceeds to pay your balance. A record of foreclosure is not a very encouraging detail that
you would like to see in your credit report. This is why it’s very important to pay attention to
your home loan payments.
5. Tax liens. If you fail to pay your property taxes, the government can seize your property, put it
in an auction and use the money to pay down your tax liens. If your property has been
foreclosed, the proceeds will be used to pay down your debts to your mortgage lender and tax
liens as well. Tax liens will remain in a credit report for ten to 15 years.
6. Lawsuits and Court Judgments. It’s important to keep in mind that if you do not take your
payment obligations seriously, a creditor can take legal action against you by filing a lawsuit. If
the case is found valid and a court judgment has been made, it will be included in your credit
report and remain for up to 7 years.
Consumers are advised to check their credit reports on a regular basis. If you seen any
misinformation in your credit report, particularly in the Public Records section of the document, you
can send a letter to the credit bureau that issued your report. For instance, if it has been seven years
since you’ve been discharged from bankruptcy, ask the credit bureau to remove the remark from
your credit report. Don’t let negative information stay in your report for than the time it’s due time
to prevent it from inflicting damage to your personal credit.
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