What Derogatory Means on Your Credit Report

What Derogatory Means on Your Credit Report loading="lazy"
Dear Experian,

What does "derogatory" mean when it shows up on my credit reports?


Dear JUA,

The term "derogatory" means the information is negative and will likely hurt your ability to qualify for credit or other services.

What Is Considered Derogatory?

A derogatory account is one that is seriously past due. Most commonly, the term derogatory refers to accounts that are 60 or 90 days past due or more. It also includes collection accounts, charge-offs, repossessions and foreclosures. It may also refer to other information that indicates credit risk, such as bankruptcy and public records.

Impact of Derogatory Items In Your Credit Report

If you have a derogatory item in your credit history, it can have a substantially negative impact on your credit scores and your ability to qualify for new credit. It can also hinder your ability to rent an apartment or obtain a cell phone or other utilities in your name.

While paying off a derogatory account won't automatically remove it from your credit history, it will be updated to show it has been paid, and lenders may view a paid derogatory more favorably than an unpaid one.

If the item in question is a collection account, some of the newer credit scores no longer include paid collections in their calculations. This means paying off a collection account could help your credit scores right away.

Thanks for asking.
- The "Ask Experian" team