What Does “Derogatory” Mean on a Credit Report?

Quick Answer

“Derogatory” is seen as negative to lenders, and can include late payments, collection accounts, bankruptcy, charge-offs and other negative marks on your credit report. This can impact your ability to qualify for new credit.

A man looking at his computer
Dear Experian,

I have something showing on my credit report called "derogatory." Can you please explain to me what that means?


Dear WDS,

A derogatory item is considered negative, and typically indicates a serious delinquency or late payments. Derogatory items represent significant credit risk to lenders, and therefore are likely to have a substantial effect on your ability to obtain new credit or services.

What Does Derogatory Mean?

Your lenders may have varying definitions of what they consider derogatory, but an account that has been labeled derogatory on a credit report usually indicates a serious delinquency of 30 days or more past due. Accounts that have been charged off, collection accounts or accounts showing a status of repossession or voluntary surrender, foreclosure or government claim may all be considered derogatory. Bankruptcy public records and accounts showing discharged in bankruptcy may also be labeled derogatory.

How Does a Derogatory Account Affect My Credit?

Your payment history is the most important factor in your credit scores, so even a single late payment can hurt your scores. However, a seriously delinquent or derogatory account, such as a charge off or collection account, will be harder to recover from than just one or two missed payments. While some lenders still may be willing to extend credit to someone with derogatory items on their report, they may do so with less than favorable terms, such as higher interest rates or fees.

Derogatory accounts or items such as collection accounts and bankruptcy may also prevent you from qualifying for an apartment. You may also have to pay hefty security deposits to open a cellphone or other service account.

Accounts with derogatory payment history can remain on your credit report for seven years from the original delinquency date. A Chapter 13 bankruptcy remains on the report for seven years from the date it was filed, while a Chapter 7 bankruptcy may remain part of your credit history for 10 years from the date filed.

How Can I Improve My Credit If I Have a Derogatory Item on My Credit Report?

If you have a derogatory item in your credit history and are trying to rehabilitate your credit, the following steps can help you get started:

  • Bring past-due accounts current. Your payment history is the most important factor in your credit scores. If you have accounts that are currently past due, bring them current as soon as you can, and make all payments on time going forward.
  • Pay off outstanding debts. If you have outstanding debts, such as collection accounts, paying them off can help your scores right away. Many of the newer credit scoring models no longer include paid-off collection accounts in their score calculations.
  • Pay down high credit card balances. Your credit utilization rate, or balance-to-limit ratio, is another very important factor in your scores, so keeping your credit card balances as low as possible is good for scores.
  • Focus on your risk factors. When you order your free credit score from Experian, you will receive a list of the credit risk factors that are most impacting your score at that time. Improving on these factors will help you increase your creditworthiness.
  • Add on-time payments with Experian Boost®ø. You can get credit for your on-time utility, cellphone and streaming service payments by adding them to your Experian credit report with Experian Boost. Experian Boost is a free feature, and you will be provided with a free credit score both before and after your payments are added.
  • Sign up for credit monitoring. Experian's free credit monitoring service can help you stay on top of changes to your credit information as well as alert you to signs of potential fraud sooner.

Thanks for asking.

Jennifer White, Consumer Education Specialist