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How Long Do Derogatory Marks Stay on Credit? A Detailed Guide

Written by
Ashley Altus, CFC
Ashley Altus is a personal finance writer who covered financial planning with a focus on money management and household finance for OppU. She is a Certified Financial Counselor through the National Association of Credit Counselors. Her work has appeared with O, the Oprah Magazine; Cosmopolitan Magazine; The Smart Wallet; and Float.Today.
Read time: 5 min
Updated on March 12, 2024
Bad marks on your credit report don’t have to haunt you forever. So why not start cleaning it up now?

Negative reporting on your credit report can have a serious impact on your finances. Rather than turning to despair, loan applicants should learn more about how to work with derogatory marks on their credit reports. Credit reports don’t have to haunt you forever. There are empowering steps you can take to mitigate the effects; it just takes patience and learning.

If you have a credit score in the 500-600 range, there might be some derogatory marks on your credit report. In this article, we will look at what a derogatory mark is, how it can affect your credit score, and what steps you can take to remove it.

What Is a Derogatory Mark on Your Credit Report?

A derogatory mark refers to a negative item on your credit report. This can indicate that you have missed a deadline or have had to make a late payment on your credit card. A derogatory mark can reveal that you have a credit risk, which can raise an alert for bankers or landlords that you may not have a stellar credit history.

Derogatory marks can also include defaults, collections, charge-offs, foreclosures, tax liens, and bankruptcies. These are all factors that can negatively impact your credit score -- and your ability to secure a loan or line of credit. For first-time loan applicants, understanding your credit report is even more significant.

For example, students applying for student loans with bad credit cosigners will be subject to the same derogatory marks their cosigners will receive in the event of late repayments.

When your credit score is in the 500-600 range, you may find it difficult to find lenders who will extend credit to you -- but you don’t have to let this situation dictate the entire course of your life.

Bad credit doesn’t have to be forever. Most derogatory marks eventually fall off your credit report. So why not start by setting yourself up for success right now?

How long will derogatory marks stay on my credit report?

Most negative marks stay on your credit report for seven years, under the Fair Credit Reporting Act (FCRA). This isn’t a hard-and-fast rule, but it’s a baseline to keep in mind.

Filing for Chapter 13 bankruptcy stays on your report for ten years, while Chapter 7 bankruptcy is removed after seven years. Hard inquiries -- when a new lender pulls your credit score -- will stay on your report for two years, but the drop will only be a couple of points.

If your credit history flaunts missed payments or other types of negative marks, it may comfort you to know that the older the delinquency, the less it will impact your score.

“Late payments will gradually fade off with time and become less important,” says Reilly S. White, Ph.D., an Associate Professor of Finance at the University of New Mexico.

A late payment from three years ago won’t impact your score as much as a late payment from three months ago. After seven years, the late payment will be removed from your credit report altogether.

Will my score increase after a certain length of time?

When credit bureaus remove negative marks from your credit report, you may see your score increase, depending on the status of your other accounts. If you’ve fallen behind on your debt, you’re not as likely to see a positive bump in your score.

“If the negative account is no longer on your credit report, it’s no longer an influence on your credit score,” says Bruce McClary, vice president of communications at the National Foundation for Credit Counseling. “You’re likely to see a change based on the deletion of the account, and if there are no other blemishes on your account, it can make a significant positive difference in the credit score.”

As you address negative items on your report and as your score grows, so will your options for credit. Find additional tips here to learn more ways to raise your credit.

4 Key Steps to Remove Derogatory Marks from Your Credit Report

If your credit history is deficient, you don’t have to wait for your credit report to heal itself. Here are four actions you can take immediately to start nudging your score in the right direction.

No. 1: Pull your credit report and dispute errors

Step number one to removing derogatory marks from your credit report is to review a copy of your credit report. This way, you can gain an understanding of which types of negative marks are affecting your credit score. Make sure you know how to read your credit report correctly, looking for inaccuracies in loan amounts, repayment due dates, and current account balances. This is considered a soft inquiry and won’t affect your credit score.

If you do find inaccurate information on your account, you can dispute it with the credit agency. Getting incorrect charge-offs removed from your credit report is pretty simple and can help improve your overall credit rating.

Checking your credit report won’t impact your credit score, and you have the right to request one free copy of your credit report each year from This report will include your credit history from the three major credit reporting agencies (Equifax, TransUnion, and Experian).

No. 2: Pay on-time

One of the most important factors in your credit score is payment history, which means paying your debts on time. With every on-time payment you make, you’ll start building a positive credit history.

“Even though you may have negative information on your report, a positive payment history that continues to grow will boost your credit score,” White says.

Positive information stays on your credit report, even for closed accounts, for up to ten years.

No. 3: Pay off outstanding debts

If you’re behind on your debt payments, catching up will help reduce your utilization ratio, which is the percentage of available credit you’re using. This is the second biggest factor making up your FICO score, so it’s important to address it when looking to improve your score.

Balances that are too close to your credit limits can lower your credit score, even if you’re making on-time payments.  When your credit utilization is too high, it appears as though you’re too reliant on your lines of credit.

While bad debt does fall off your credit report after seven years and won’t impact your score anymore, your creditors and collection agencies may still collect on it. “Just because it drops off the report after seven years doesn’t mean it’s not legally collectible, McClary says. “Out of sight shouldn’t mean out of mind.”

The statute of limitations for debt depends on the type of debt, your state, and the state where the suit was filed.

If legal action has been taken against you for your debt, creditors may pursue wage garnishment to cover the balance owed. For this reason, it’s important to continue making payments on your debt even if it no longer appears on your credit report.

No. 4: Rebuild credit with a secured credit card

As negative marks may make lenders wary of extending new credit to you, it may be attainable to qualify for a secured card to help rebuild your credit.

With a secured credit card, the borrower puts down a deposit upfront to serve as collateral in the instance they cannot pay their bill on time. These types of cards are less risky for the lender, but can still provide benefits to the borrower.

Paying your secured card on time can build a positive payment history and increase your score. The Federal Reserve Bank of Philadelphia found that consumers who used secured credit cards increased their creditworthiness.

Credit Score Repair Takes Time

When your credit score is in the 500-600 range, you may find it difficult to find lenders who will extend credit to you. However, as more time passes, the negative marks on your credit report will diminish.

“Having negative information drop off does increase your score, but what increases your score up to that point is the seven years of strong repayment and getting back on track,” White says.

Remember that every month of positive credit behavior builds and helps you pay down debt. The most recent information always counts the most. As you address negative items on your report and as your score grows, so will your options for credit.

Article contributors
Bruce McClary

Bruce McClary is vice president of communications for the National Foundation for Credit Counseling® (NFCC®). Based in Washington, D.C., he provides marketing and media relations support for the NFCC and its member agencies serving all 50 states and Puerto Rico. Bruce began his nonprofit financial counseling career in 1998 when he moved from the lending industry to become a credit counselor.

Reilly White

Reilly S. White, Ph.D., is an associate professor of finance and the Endowed Bank of America Lecturer at the University of New Mexico. In addition to teaching MBA students, White serves as the University Outreach Chair for the Chartered Financial Analyst Society of New Mexico, chair of the Cassidy CFA Scholarship, and advisor for the $3.6 million student-run regent’s portfolio.

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