What is a Derogatory Mark?

What is a Derogatory Mark?

Derogatory marks are negative records on your credit report that can damage your credit and generally stay on your credit report for seven years or more. They may sound scary, but don't bury your head in the sand. If you have a derogatory mark listed on your credit report, learn more about how these marks work below.

What is a derogatory mark?

A derogatory mark is essentially a long-lasting negative record on your credit report. These marks will likely hurt your ability to qualify for credit or obtain desirable rates, and can typically take seven to ten years to clear from your credit history.

Some examples of especially severe derogatory marks include:

  • Bankruptcy: This generally means that you have entered into a special legal proceeding to request certain forms of relief from your debt obligations. Because it's a drastic step and one of the most damaging negative records you can have on your credit report, it is usually a last resort for addressing overwhelming debt.
  • Foreclosure: This generally relates to situations where you have fallen behind on mortgage loan payments and the lender has undergone a legal process to attempt to force a sale of the home used as collateral for the mortgage loan.
  • Collections: These are accounts that have been reported as sent or sold to a third-party debt collector by the original creditor because of missed payments.
  • Tax lien: Tax liens may occur when you neglect or fail to pay a tax debt on time. It's important to know that unpaid tax liens may remain on your credit report indefinitely.
  • Civil judgment: This information usually relates to civil lawsuits which require the payment of damages (for instance, if you lost a civil case or failed to respond to a lawsuit at all).

What does it mean for my credit?

As the number of derogatory marks you have on your credit report is really important in some credit scoring models, it's best to minimize these marks. Just one derogatory mark can drop your score drastically.

What can I do about derogatory marks on my credit report?

If the derogatory marks on your credit report are accurate, there often isn't much you can do and you should be wary of credit repair companies that claim they can remove this information. The best practice is to keep the rest of your credit in good health and wait for those marks to naturally fall off over time.

As with other erroneous information, if you see a derogatory mark on your credit report that is inaccurate, you can dispute it with the credit bureaus.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

All Comments

Results 1-10 of 66Results per page: 5 | 10 | 25Page 1 of 7   Previous | Next
6 Contributions
2206 People Helped

Helpful to 1884 out of 2044 people

Listen up, folks...

*DO NOT PAY YOUR ACCOUNTS IN COLLECTION*

*YOU ARE ONLY THROWING AWAY YOUR MONEY*

Paying a collection company means you are giving your money away to a seedy collection company who strongarms and confuses people into paying these things all the time.  Your benefit?  Nothing.  *Nothing at all*

The original creditor has already sold the debt to the agency and your credit score is tarnished for 7 years.  End of story.  Welcome to America!

Take a swing back at the completely corrupt system that has put you in this situation and DO NOT PAY THE COLLECTION AGENCY EVER.

Here's why:

No matter what happened to lead you to having a derogatory mark -- whether it was actual deliberate negligence with a credit card, or completely uncontrollable medical debt -- the greedy lawyers and bank lobbyists who set up this idiotic system simply lump all of this debt together in one big "you didn't pay for this" category on our reports.

The end result is: you pay higher interest rates for EVERYTHING.  Which means *even more money* for the big banks.  Good luck getting our government to fix this, too!  It benefits those who have all the money, which incidentally are the people who run the government.

No matter how small the bill, no matter if it was an insurance company's clerical error / disorganization that led to the mark showing up on your report; It's there, it's severely impacting your credit score, and it's not going anywhere for seven years.  Period.

There seems to be a lot of faux information floating around that you can "pay-to-delete" accounts in collections from your report, but this is completely and totally unsupported by ANY facts.  I have *NEVER* seen a single *reliable* reference for how to handle this.  If pay-to-delete isn't analogous to the tooth-fairy, then CreditKarma should offer an integrated service (no 3rd party stuff which just seems like paid advertising) to help with this specific issue.  They don't.  Why?  Because you can't do this.  Because it's illegal.

At a minimum, CreditKarma should have an official "pay-to-delete" info page to dispell these rumors and set the facts straight.

Reply by
sherry729

1 Contribution
319 People Helped
Helpful to 319 out of 375 people

I negotiated with 2 collection agencies in the past and did get a letter stating that once the account was paid in full they would request that the negative information be removed from my credit report and it was. They also sent me a copy of the letter that was sent to the 3 credit bureas to have the negarive information removed.  I guess it is the way you approach the collectors, not in a negative way but willing to co-operate to resolve the issue cause that's all they want is to receive their money.

Reply by
ViskiB

1 Contribution
473 People Helped
Helpful to 473 out of 565 people

This isn't completely true.  While you sytill have it on your report, if you settle or pay in full, it will be marked on your report as "settled" or "paid", and my score did go up as I was put in good payment history by the credit card companies.  

Banks actually do look at those notes when opening lines of credit including car loans, overdraft lines, ect, as I found out when opening a checking account and they made a comment about how it's much better that I had it marked as paid or they were going to refuse the overdrft line.

Also, if you don't pay your debt, credit card companies can and will sue you, and legal fees are a lot more expensive in a courtoom than to just hire one to help settle the debt or just settle the debt yourself if you can.

Reply by
MrsMoney1

1 Contribution
195 People Helped
Helpful to 195 out of 232 people

This isn't true. As a manager of a bank I can tell you that while a collection item does stay on your report for at least 7 years like all other items, paying off is more beneficial than leaving it unpaid. Your score does improve, I've worked with clients and saw this first hand. Plus lenders do look at the notes on collection items that say with paid or unpaid. I'm more willing to work with a client who I see tried to pay items in collections than one I see just refused to pay. Yes you may get higher interest rate with paid collections but that is better than getting outright denied for having unpaid ones.

Reply by
LeDuff

1 Contribution
3 People Helped
Helpful to 3 out of 5 people

So what to do if they serve you court papers? Or have court papers served to you? What the legal rammifications of handling this? What is the consumer's legal recourse in a situation such as this?

Reply by
mdc9665

1 Contribution
0 People Helped

I dont agree ,  If you ignore stuff in collections , you can get sued for the money , the debt can also get resold

and that starts the clock again . If I were you I'd pay it - even if it takes time to drop off - it will show you made good on a debt 

and that always looks good. Simply ignoring it is not the answer -  most debt is comsumers who use credit cards to excess and that is your own fault

Reply by
Briizy

2 Contributions
0 People Helped

I would just like to respond to this past by saying that i only had one derogatory mark on my credit which wad there for about 4 years. I just paid it two days ago and my equifax score already shot up 59 points. So what you're saying to people is untrue

Reply by
kclsparky

8 Contributions
41 People Helped

You can sometimes get a collection agency to remove a negative account from the credit bureau's with a pay-to-delete letter. It's not against the law. The collection agency can remove any negative item from your credit report that they put there in the first place if you know how to go about it. Their in business to make money, not to cause bad credit scores. They don't care about your credit score they only care about collecting the money that they say you owe. Go to Google and type in Credit Solution Program. Good choice. 

Reply by
GrumpysGrandma

1 Contribution
6 People Helped

From one speaking from experience.  Been there done that.   The best thing you can do is work something out with a company BEFORE the balance goes to a collection agency.  If and when it does go to collection, you best get on it and arrange some kind of payment plan with said collection agency.  The only reason we get sent to collection agency is because we live beyond our means, depending on credit cards to have "the things we want".  The smartest thing you can do is cut up the cards and learn to live on your income.  If you can't work a deal with your creditors, a last ditch effort is to get with a debt counseling company.  There are many reputible ones out there.  They make arrangements with your debtors to lower your interest rate, they close all your accounts and they take pre-set automatic deductions from your checking/savings account each month.  That payment will add up to less than what you are currently paying on your accounts that charge interest.  I have been living credit card free now for 2 years and am so much better off by doing so.  No more impulsive buying.  If I don't have the money, I just do without.  AND since I cut up the cards, I am now even to save a little each month, and I do live on a fixed income (Social Security).  If I can do it, you can do it.

Reply by
belleup1

1 Contribution
0 People Helped

As sherry729, I managed to get one collection debt plus the original debtor removed by a negotiation prompted by the original debtor and collection debt company. I was hesitiant at first, not sure if they would hold up their end of the agreement, but they did. The debt was cut in half and all I had to do was not miss any agreed payments. I did my part and they kept their word and both were removed from my credit reports. I am currently working on another one by same collection agency and have two more monthly payments left and within two months after paid in full, both will disappear from my credit reports. The only thing to be concerned about is if you don't intend to keep your end of the agreement, your last contact date will appear on your credit report and it starts over for another 7 years. So, be sure you can manage the agreed monthly payments.

Reply by
Bostonia12

2 Contributions
4 People Helped

I think if the debt is belong to you ,  then you should pay, do not matters if is in clollections, the debt still belongs to you, we can not blame the system , for ours mistakes, can we? also While you sytill have it on your report, if you settle or pay in full, it will bemarked on your report as "settled" or "paid", and your  score did go up.

Reply by
aerosmithme

1 Contribution
0 People Helped

i think the credit score system is serioously messed up!!! i have no credit cards, no checking or savings acct, no car or student loans, no loans whatsoever. i have paid some of my late payments off and its still affecting my credit scores.  i have sent the 3 credit companies my paid receipts from debts incurred on my credit history and nothing happened. my crfedit score stayed the same!! then all of a sudden, my credit score goes down 50 points and i have no idea why!!!!!  it seems that no matter how hard you try to better your credit score they don't care and they do whatever they want to your credit score.  why even try anymore???? can anyone answer that?????

Reply by
zenlightenment

1 Contribution
0 People Helped

So you are suggesting people don't pay their debts? I have made many financial mistakes and I have come around to understand that it is MY responsibility that my credit is poor. It was ME that failed to negotiate a payment arrangement. Creditors often give you MONTHS to rectify the debt before sending it to a collection company. Did they provide the service or godds? Then pay the bill!!  

In my opinion, it's just this lack of personal accountability that has gotten you in this situation.  I finally got a wake up call when contacting a lawyeer that had previously handled my bankruptcy,. I was trying to get out of all the debt I had reaccumulated when he simply said to me, "...or you can just, you know, pay the debt..." which really gave me a reality check.

Just do the right thing!!!  It takes awhile to get out of debt. You can do it, just be patient!

Reply by
gerardobarajas

2 Contributions
0 People Helped

oh and it depends on what credit repair company your hire there are alot of them some are not good they play it off to much and you end up paying alot with no results but there is some that are really good at it

Reply by
gerardobarajas

2 Contributions
0 People Helped

let me tell you something even though your negative items are accurate they could be deleted. using the laws that alot of people dont know about my uncle got his items removed from his credit report so it could be done his the proof

Reply by
fyrkiller

1 Contribution
0 People Helped

Okay....if you negotiate a lump sum payment and get the 3rd party agency to agree to stating: "no record found" in regard to your account (hahaha or non-account in this case) each and any the big 3 are obligated to remove said remark from your record.

Reply by
hulagirlmele

1 Contribution
0 People Helped

thanks

Reply by
WithPulp

1 Contribution
2 People Helped
Helpful to 2 out of 4 people

I've just learned that I have a $160 medical bill in collections. My bigger concern is a tax lien that's been on for years. I know I need to take care of (afraid to begin and don't know how to start) but meanwhile should I pay the collection agency or not? Will it even make a difference? Any thoughts appreciated. 

Reply by
barrelmaker58

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

If you incur a LARGE debt you my the get "served" by a third party collections group to show-up  in court -if you own your home you could loose it to the collection agency to satisfy your settlement

You can however settle for pennys on the dollar

Reply by
caroldan

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

I didn't use this card that often and they canceled it before it expired!

Reply by
vungtau68

1 Contribution
1 Person Helped
Helpful to 1 out of 4 people

thanks for the information i will never pay collection agencys any more money i have answering machine i talk to them no more thank you

1 Contribution
241 People Helped

Helpful to 241 out of 261 people

ITS AMAZING HOW FAST A DEROGATORY MARK WILL SHOW UP ON THESE REPORTS AT  LIGHT SPEED AS OPPOSED

TO POSITIVE INFORMATION SHOWING UP WEEKS AND WEEKS LATER.

Reply by
ivanapr

2 Contributions
28 People Helped
Helpful to 28 out of 31 people

Enter Your ReplyThe reason the negatives go on your report like "light speed" is because that is how these 
credit reporting agencies make their money.  They pay the creditor for each negative remark they report to them.

TU, EX and Equifax are making money off of everyone's misfortune....it's appalling!  They are privately owned so

let's see I have to pay a "privately owned" company to get my credit report so they can "control" my life.. They

should be run out of business but the government continues to do nothing!  Try complaining to the FTC and see where it gets you .....NOWHERE!  

Reply by
wec123

1 Contribution
25 People Helped
Helpful to 25 out of 38 people

Enter Your Reply ALMOST LIKE GAS PRICES.. THE SAME PPL MUST BE IN CONTROL OF BOTH THINGS

2 Contributions
130 People Helped

Helpful to 130 out of 151 people

What ever you do... Remember; ONLY GO BY WHAT THE 3 Credit Bureau's are reporting. If you've fixed a "derogatory mark", but it's still showing on a "Credit Site", such as this one, it doesn't mean anything. Example... This site works in unison with TransUnion. But, it isn't TransUnion's "priority", or obligation, to tell C.K.I. what to list, on any given consumer. It's on C.K.I. to do their own job, and attempt to give an accurate view of what the consumer's credit report is saying. *I use the term "attempt" very loosly, here.

Also, if you've been the victim of identity-theft, you'll need to be willing to do the neccessary foot-work, if you want to redeem your credit, back; but by filing, completing, submitting, a notarized affidavit of complaint, with the FTC, along with any proof, &/or a police report (or, an incident report, from the police), it is very possible you can recover. 

When I was first made aware, of my situation, I felt it to be a hopeless-case. It's been one year, and all but one fraudulent account has been reversed. That last account wasn't, even, listed with any of the 3 agencies. It was a CHECKING account, that was opened at a bank, in my name. Therefore, the money-owed to the bank, in my name, was turned over to the Chex System, Inc.. Totally different entity, entirely!! lol!!

Point-being, don't go by what this site tells you, if you know what the bureaus say is fixed. And, if you're a victim, check the banking systems, too. They AREN'T connected, with credit bureas, for whatever reason.

2 Contributions
217 People Helped

Helpful to 127 out of 162 people

Notice it's only on the little guys credit report. Look at all of the big companies and rich people that file, try looking for that information to tarnish their credit. Look at all of the crooked politicians who have embezzlements and sex scandals, there is nothing to tarnish their reputations and if so, they have ways of getting around it. I used to work as a skip tracer, I saw a lot of credit information when time for repossessions. One case that I will never forget was the guy who bought a brand new car with no job, no income, and no credit at all or it was bypassed. After he did not make the first two payments, of course they wanted us to pick it up. My question was how did he get it in the first place?

Reply by
doowoplover534

3 Contributions
161 People Helped
Helpful to 161 out of 202 people

First of all ,how did these credit companies come into being? Whatever happened to our PRIVACY? Where these Bureau's know your every financial move  A disgrace. The system is RIGGED in favor of the rich 1% who own everything .They try to keep your credit rating low so they can charge more interest and make more money.God bless America.  These bureau's were created and exist thanks to SELLOUT politicians. THis should be ILLEGAL and unconstitutional.

1 Contribution
32 People Helped

Helpful to 32 out of 38 people

if i pay off the collection the money i owe would it show up as payed and bring my score up?

Reply by
cc1967

2 Contributions
78 People Helped
Helpful to 73 out of 80 people

Before you pay anything ask to be put in writing!!! Do not give them access to your bank account no matter what they say, they will clean you out and there's nothing you can do!

Get the letter from them saying that the account will be satisfied and paid in full with the amount you agree to, then sent money order or certified check and keep the receipts forever. Hope this helps .

Reply by
wildat3

1 Contribution
7 People Helped
Helpful to 7 out of 9 people

Yes, it absolutely will.  I'm working through mine now.  I've been diligent about it for only a few months but my score has went up 20 points!!  Don't believe everything you see on the internet, do your own research and not everything is big brother or a conspiracy.  You have to pay for your bad decisions in credit PERIOD!  Why wouldn't you have to pay it back?  Wouldn't that be stealing?  Reading some of these comments saying such is crazy!

Reply by
LDH3

1 Contribution
10 People Helped
Helpful to 10 out of 21 people

no

1 Contribution
35 People Helped

Helpful to 35 out of 44 people

My feelings are that the "trickle down" effect is what we are victims of, which we are forced somewhat into debt. Reality is its a game to big banks and government and every other large finacial institution that dangles money in front of working class and then judges us by numbers our worth, **** shame.

1 Contribution
13 People Helped

Helpful to 13 out of 14 people

Derogatory marks are a beast to resolve. I am currently working on correcting my credit report so that it is accurate and the errors are downright shameful. From the variations of my addresses and social security number to the accounts listed that were to be removed because they were too old to be reported, each of the 3 credit reporting agencies were impossible.

I completed the disputes online but after their "investigations" were completed, I ended of having to call them and fax receipts or other information in order to dispute what the information provided by the collections agencies and creditors.

As for paying off collections debts, I agree with an earlier poster, that it can improve your score IF you deal with the original creditor and ask that they work with you. I was able to obtain settlement on several accounts and it was reported timely (within 30 days). Two creditors removed the items from my reports altogether. For an account that had been resold, one I paid the agency it was sold to, the original creditor reflected as paid too.

Unfortunately, only time can help with some of the items on your report but new creditors do consider the paid or settled status when reviewing your history and extending credit. This has been a hard lesson and a frustrating one but going forward I can assure you this journey will ensure that I pay every bill on time or make appropriate arrangements when I cannot. One cannot always control his/her finances and things happen that can ruin any budget but outside of making payments on time each month, communication with your creditors is the best way to obtain and keep a good credit history.

1 Contribution
9 People Helped
Helpful to 9 out of 11 people

Here's my case,

I had discontinued my wireless  contract  with Sprint . I entirely forgot to pay the last months bill since I was no more with sprint . Then couple of times , I got a call from collection agaency where I tried to make the payment over the phone. But the payments were declined though I had no payment issues  with the same credit card at other stores.

I requested the collections guy to call me later that week and it didn't happen .

Now , when I reviewed my credit report , I found a derogatory makr  reported on my .

Now my question is 

Can i get this deroogatory mark repaired by paying of the bill(~$200) I owe sprint ?

Or do i need to negotiate it with the collection agency ? 

My current score is 690(after the derogatory mark).

I am planning to apply for some credit but am afraid this derogatory makr on my report will harm my chances of credit approval.

Any suggestions in this regardd will be greatly appreciated .

Thanks,

Pradeep

1 Contribution
24 People Helped

Helpful to 24 out of 34 people

I have 1 derogatory mark according to them.  How do I find out who put it there and for what?

7 Contributions
30 People Helped

Helpful to 19 out of 24 people

Tax amt. owed to State on agreed payment plan.  All payments made on time as agreed.  Didn't know it was shown as a "lien" until credit check.  Now, 7 years later, cannot get it removed from State of GA or Newton Co.  How do I get them to stop reporting?

Reply by
Roidenhimer

1 Contribution
23 People Helped
Helpful to 23 out of 29 people

Just because you've paid the lien to the state doesn't mean that they report it.  I had a federal lein and had to go to the clerk of court in the county where the lein was recorded.  I had to have recorded the release of lein from the IRS.

2 Contributions
16 People Helped

Helpful to 16 out of 20 people

Please take heed from my situation and be very careful ordering subscription services for your Roku or other such devices.  I have a recurring $1.99 monthly charge on my Capital One account for a Roku channel which I cancelled months ago, and it keeps getting charged to my credit card.  It is from ENTERTAINMENT STUDIOS and  there is no way to get rid of them, no number to call, no account number, etc. Capital One said to just dispute the charge every month, but I am afraid I will get a derrogatory remark on my credit report for this, and if I do there will be nothing I can do to get rid of it for 7 years.  Cap 1 said have asked the credit bureaus to delete any negative information they may have reported because of this charge, but why would they report anything, since I keep paying it?   

Reply by
j1ceasar

2 Contributions
36 People Helped
Helpful to 32 out of 34 people

as far as roku is concerned - you can delete your credit card info for roku after you set up account. as far as the charge is concerned ,

immediately ask the credit company for a NEW account number.

And  specifically ask Capital -NOT to authorize the charge for that account.

Then call ROKU as well as cap one for the merchant contact info - by law - they must have it as well as give it to you. 

Reply by
Axman1413

1 Contribution
14 People Helped
Helpful to 14 out of 17 people

Yes I was going to say that you should have Captial One treat your current card as stolen and request a new card. Someone got ahold of the information for one of my Paypal Business Debit Mastercards and we just cancelled the card and issued a new one, and the charges stopped. 

Credit card companies offer the same services under the identity theft or stolen cards policies. I actually suggest using a Paypal account directly (not the card you get as a business member) to perform subscription based purchases. That way, if you ever have a problem with the service not cacelling your service as requested, you can cancel the subscription directly through your Paypal settings. 

Reply by
articfox2310

1 Contribution
20 People Helped
Helpful to 20 out of 26 people

I had a reoccurring monthly charge on one of my credit cards that I couldn't cancel as well.  What I finally had to do was pay off that particular , then cancelled it...end of monthly charge.  When the company called me, I found out it was something from one of those "free" items that I gave my credit card number to pay shipping charges.  I hope you have already found a solution by now...

Reply by
F936

1 Contribution
0 People Helped

Enter Your Reply

Just yell Capital one to reissue you a new car with a new number and that $1.99 a month bill will go away if you called and canceled the service the person may have not did there job to remove the monthly withdraw. But it should not effect your credit.

Results 1-10 of 66Results per page: 5 | 10 | 25Page 1 of 7   Previous | Next

Comment on this Article

Write your comment:
Enter Your Comments