What Are Derogatory Marks and How Do I Remove Them?

Derogatory marks are negative items on your payment history. They can be caused by a variety of factors, including late payments, foreclosure, bankruptcy, charge-offs, and other negative items on your credit report. It takes years for derogatory marks to be removed from your credit report, so it’s important to know what causes them and how to avoid them. ^[1]

Key points

• Derogatory marks are negative items on a credit report caused by missed or delinquent accounts, such as late payments, collections, or bankruptcy.
• Most derogatory marks relate to payment history, which is the largest factor in credit scoring models.
• Most derogatory marks remain on a credit report for up to seven years, while some bankruptcies can remain for up to ten years.

How do derogatory marks impact my credit score?

Negative information is passed along to the three major credit reporting agencies (Experian, Equifax and TransUnion) and can lower your credit score as compiled by FICO® and VantageScore.

Worse, negative marks can pile up over time. Each missed payment will count against you, and as they accumulate, they can put you in danger of even more bad credit in the form of things like foreclosure and repossession.

Regardless, the more payments you miss, the more it will hurt your credit, whether you’re talking about payments to credit card companies, on personal loans, or to a mortgage lender. ^{[1] [2]}

How long do derogatory marks stay on your credit report?

Typically, derogatory marks can stay on your credit history for seven years. Chapter 7 bankruptcy can stay on your credit report for up to ten years.

Types of derogatory marks

Derogatory marks are negative items that can appear on a credit report when an account is not handled as agreed. These marks may include late or missed payments, collection accounts, charge-offs, repossessions, foreclosures, and bankruptcies.^[1]

Many derogatory marks are tied to payment behavior. Payment history is a major factor in credit scoring models, accounting for 35% of a FICO® Score and 41% in VantageScore 4.0. When payments are missed or accounts become delinquent, those events may be reported to the credit bureaus and recorded as negative items on a credit report.^{[3] [4]}

1. Late payments

Late payments may not appear as derogatory marks on your credit report if you’re just a few days past due. But if you fail to make your payment within 30 days of the due date, your bill begins to have a negative impact on your credit score. Even if it’s already 30 days past due, you should resolve the debt as soon as possible to avoid another negative mark when 60 days have passed. Your lender can write off or charge off bad debt by selling it to a collection agency if you let your payments become seriously delinquent.^[5]

2. Foreclosures

A foreclosure occurs when a borrower falls behind on mortgage payments and the lender takes ownership of the home. Both the missed mortgage payments leading up to foreclosure and the foreclosure itself may appear on a credit report.^[1]

3. Charge-offs

A charge-off occurs when a creditor writes a debt off as a loss after a borrower has failed to make payments for an extended period of time, although the borrower is still responsible for repaying the debt. Typically, the lender will sell your debt to a collection agency, which will continue trying to collect what you owe — you just owe it to someone else now.

In the meantime, the charge-off hurts your credit score, although most of the damage has already been done by the missed payments that got you to that point. A charge-off usually occurs after 120 to 180 days, which means you’ll have missed four to six payments by then and your credit report already will have taken repeated “hits.” See our related article about how to remove a charge-off from your credit report.

4. Repossessions

A repossession is similar to a foreclosure. In both cases, a lender is taking back something you’ve stopped making payments on, but in this case, it’s a vehicle instead of a home or property.

While a foreclosure generally takes time, a repossession can occur relatively quickly. Some states allow repossessions after just a single missed payment, and without providing any notice. If you miss a car payment, you should contact the lender as soon as possible to see if you can come up with a payment plan.^[6] If you can’t, you may be forced to relinquish the vehicle.

Meanwhile, the late payments that led to the repossession will create derogatory marks on your credit report and hurt your credit score. ^[1]

5. Collection accounts

While both foreclosure and repossession involve defaults on secured loans (secured by collateral), other types of loans are unsecured. That means the loan was granted without the borrower putting up any collateral. In cases where these loans go into default, they may be sold to a collection agency. This often happens after a charge-off (see above), or a lender may have its own collections department to handle these delinquent accounts.

If a defaulted loan is sold to a collection agency, the collection account can show up on your credit report, and this can have a serious negative effect on your credit scores. ^[7]

6. Student loan delinquency

Unlike other late payments, which go into delinquency and are reported to credit bureaus after 30 days, past-due payments on student loans don’t get reported until they’re 90 days late. That’s when they will begin to affect your credit score.

If a borrower defaults on a federal student loan, the entire unpaid balance becomes due immediately. Default can result in the loss of eligibility for deferment, forbearance, and additional federal student aid. The government may also garnish wages, withhold tax refunds or certain federal benefits through Treasury offset, and add collection costs to the loan balance. Borrowers who are having trouble making payments should contact their loan servicer to discuss available options before the loan goes into default. ^[8]

7. Bankruptcy

Bankruptcy is a process undertaken in federal court to resolve a borrower’s debts and provide debt relief under federal law, but it isn’t without consequences. Bankruptcy can give a borrower, whether it’s an individual or a business, a chance to be free of debt.

However, bankruptcies can be damaging to your credit report and can remain on your credit report for seven to 10 years, depending on the bankruptcy. Bankruptcies fall into three categories: Chapter 7 bankruptcies, in which assets are liquidated to pay creditors; Chapter 11 bankruptcy is most commonly used by businesses to reorganize debts; and Chapter 13 bankruptcy, which reduces debt and sets up payment plans — known as “wage earner’s plans” — over three to five years.^[9]

8. Debt settlements

Settling a debt will get a creditor off your back and resolve the debt, but it will still affect your credit score. This is because your credit report will reflect that you paid less than the full amount.

Still, settling an account is better than not paying anything, and if you can’t afford to pay the full amount, contacting the creditor by phone or writing a debt settlement letter to negotiate a deal you and the lender can both accept may be an option.^[10]

How to remove derogatory items from your credit report

Negative or derogatory information can only be removed from your credit report if it is inaccurate. The Consumer Financial Protection Bureau notes that common credit report errors can include incorrect account status, accounts that do not belong to you, duplicate listings, or inaccurate personal information, making it important to review your credit report carefully and dispute any errors you find.^[11]

Dispute credit report errors

Keep up to date on your credit status by ordering a free credit report at annualcreditreport.com. Review it carefully for any errors or suspicious activity, such as a loan with a bank you do not recognize.

You can dispute any errors you find by mailing a letter to the credit reporting agency. Include your contact information and identify the specific nature of the error.

The reporting agencies must investigate your dispute and forward your documents to the company that reported the information. If you are found to be in the right, that company will have to contact all the credit reporting agencies with the correct information so it can be updated.^[12]

Wait for each derogatory item to fall off your credit report

If it turns out no error has been made, the best thing to do is to stick it out until the derogatory mark expires.

In the meantime, improve your credit by making consistent on-time payments, understanding how credit scores are calculated, maintaining a low credit utilization ratio, avoiding too many requests for new credit, and reviewing your credit reports regularly.

Send a goodwill letter

If you still have a late payment or delinquency on your credit report but have since paid the debt, you can write your creditor what’s known as a goodwill letter asking to have the derogatory mark removed. The creditor is under no obligation to do so, but may consider it in hardship cases (a lost job, medical expense, etc.) or as an act of — as the name implies — goodwill.

How to build credit after a derogatory mark?

After you’ve received a derogatory mark, it’s not the end of the world. Even if you can’t have it removed, you could still raise your credit score over time by making on-time payments, avoiding “hard” credit inquiries, paying off debt so you have more room on your credit cards, and taking steps to work with lenders.

It’s also important to know what debt to pay off first, such as revolving debt and high-interest loans.

The bottom line

Derogatory marks do hurt your credit score, and some can be more damaging than others. The more payments you miss, the more hits your credit will take.

Common steps people may take include making sure there aren’t any errors on your credit report, keeping their credit manageable, maintaining a good credit mix, and working with their creditors if they get in trouble. And, again, make your payments on time, because that’s the biggest part of your credit score.

The better your credit, the more likely you are to be approved for loans and get favorable interest rates, which can save you a lot of money in the long run.

Sources

1. Capital One. “Derogatory Marks on Your Credit,” https://www.capitalone.com/learn-grow/money-management/derogatory-credit/. Accessed January 29, 2026.
2. MyFICO®. “What Is Payment History?,” https://www.myfico.com/credit-education/credit-scores/payment-history. Accessed January 29, 2026.
3. MyFICO®. “What’s in Your Credit Score,” https://www.myfico.com/credit-education/whats-in-your-credit-score. Accessed January 29, 2026.
4. VantageScore. “The Complete Guide to Your VantageScore,” https://vantagescore.com/consumers/blog/the-complete-guide-to-your-vantagescore. Accessed January 29, 2026.
5. Capital One. “Late Credit Card Payments,” https://www.capitalone.com/learn-grow/money-management/late-credit-card-payments/. Accessed January 29, 2026.
6. Consumer Financial Protection Bureau. “If I can’t make my auto loan payments, will my vehicle be repossessed?” https://www.consumerfinance.gov/ask-cfpb/if-i-cant-make-my-auto-loan-payments-will-my-vehicle-be-repossessed-en-857/. Accessed February 27, 2026.
7. Experian. “How and When Collections Are Removed From a Credit Report,” https://www.experian.com/blogs/ask-experian/credit-education/report-basics/how-and-when-collections-are-removed-from-a-credit-report/. Accessed January 29, 2026.
8. Federal Student Aid. “Student Loan Delinquency and Default,” https://studentaid.gov/manage-loans/default. Accessed January 29, 2026.
9. Investopedia. “Bankruptcy,” https://www.investopedia.com/terms/b/bankruptcy.asp. Accessed January 29, 2026.
10. Experian. “Debt Settlement Risks,” https://www.experian.com/blogs/ask-experian/debt-settlement-risks/. Accessed January 29, 2026.
11. Consumer Financial Protection Bureau. “What Are Common Credit Report Errors That I Should Look for on My Credit Report?” https://www.consumerfinance.gov/ask-cfpb/what-are-common-credit-report-errors-that-i-should-look-for-on-my-credit-report-en-313/. Accessed February 26, 2026.
12. Consumer Financial Protection Bureau. “How Do I Dispute an Error on My Credit Report?” https://www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-on-my-credit-report-en-314/. Accessed January 29, 2026.

About the Author

Lauren Bringle is an Accredited Financial Counselor® with Self Financial– a financial technology company with a mission to help people build credit and savings. See Lauren on Linkedin and Twitter.

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.

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