Who's worse off? Person A, whose credit report contains one 30-day late payment from last month, or Person B, who has a pair of 90-day late payments from three years ago? It's reasonable to assume that the person whose payments were later and occurred more frequently will have a less favorable credit standing, right? Actually, in the crazy world of credit scoring, one recent derogatory mark can hurt your rating in a significant way.

The Quirks of Credit Scoring

In the above scenario, Person B would most likely be better off than Person A, at least in the eyes of creditors and lenders. A recent negative item happens to have a much greater impact on your score than older ones. It's just the way credit scoring works.

A good analogy is thinking of good credit as a marathon and bad credit as a sprint. Building a strong credit history is a long process. Bad credit can happen in the blink of an eye.

Whether caused by financial missteps, an unexpected job loss, divorce, or medical bills due to illness or injury, derogatory marks will let their impact be known once they hit your credit report.

A derogatory mark, or "black mark," is a long-lasting negative record on your credit report. Even just one can hinder your ability to obtain credit or get approved for a loan. Multiple ones will make you seem riskier in the eyes of lenders for years to come.derogatory mark

Missed payments are just a blemish compared to some of the more severe derogatory marks. Failing to meet your credit obligations can lead to:

  • Bankruptcy
  • Defaulting on a loan
  • Account(s) in collections
  • Having debt settled or charged off
  • Tax liens
  • Civil judgments
  • Foreclosure
  • Short sales or deed-in-lieu of foreclosure
  • Vehicle repossession

Any time that your credit accounts are not paid as agreed, you can bet that the instance will make it onto your credit report. Finally, derogatory marks can remain on your file for as long as seven to ten years.

What Can I Do to Remove a Derogatory Mark?

You basically have two options after a derogatory mark makes its way onto your credit report:

  • Wait. All black marks come off your credit report with time. And that doesn't mean that you have to suffer with a poor credit rating for a decade. While your credit score may be hurting after the initial blow, there is no reason that you can't bounce back if you practice good credit and financial habits from now on. Mainly, that means making every payment on every account on time and keeping credit card utilization low. As time passes, the impact a negative event has on your credit rating will lessen. Meanwhile, your newfound good credit practices will help your score inch upwards.
  • Talk to Your Creditors. It is possible for a creditor to stop reporting the black mark before the normal time period has passed. How? Well, you ask nicely, basically. If you have since paid back all of your debts with them, it is possible that they will do you a favor. If you still owe them, arrange terms to repay your debt and make the removal of the derogatory mark part of the arrangement (get it in writing). It can be worth a shot if you have been practicing good credit ever since the mark appeared.

It's important to know that not all types of bad credit are treated equally in the eyes of lenders. If you can show that your credit issues stemmed from one unexpected life event, but have otherwise been a reliable borrower, many lenders are willing to take that into consideration.

For those looking to clean up their own credit reports but would like help, consider getting support from a reputable credit repair service company.

Getting a Car with Damaged Credit

It takes time to repair bruised credit. Unfortunately, more often than not, vehicle needs can't wait. If you need a car but have less than perfect credit thanks to a derogatory mark, it can be hard to find financing.

At Auto Credit Express, we can connect you with a dealer that is equipped to handle your unique situation. All you need to do is fill out our free and easy online application, and then we'll be in touch. Start today, and you could be driving as soon as tomorrow.