Credit Repair

5 Worst Things That Can Ruin Your Credit Report

Your credit report is an important document. Employers, lenders, businesses, and everybody else who you are dealing with will look into these reports in order to get an idea on how good you have been with your finances, such as whether you have been making payments of all your bills and dues in a timely manner or not. The report also reflects a FICO score that shows the entire picture. There are certain things that can be a big turn off for others and they may not like to do any business with you because of that. Following is a list of five such worst possible things that nobody likes to show up on their reports.

Charged-Off and Uncollectable

Charged-off accounts refer to those loan or debt accounts where you have stopped making the repayment for more than six months. In such cases, creditors often change the status of your account as “uncollectable”. It shows on your credit report as “charged-off accounts”. The entry remains active for the next 7 years, which means you will have a great trouble getting loans or low rate insurance for all those years.

Creditors Hire Collection Agencies

When creditors hire collection agencies to get their money back, they or the agencies contact the bureau to place an entry to reflect the status of the account as “in collection”. This again leaves a very bad impression on others that you are doing or planning to do business with.

Judgments or Lawsuits

Creditors try everything possible to recover the loan amount. If even the collection agencies do not succeed in getting the money back, the creditors may file a lawsuit against you for the debt that you owe to them. In such cases, if the judgment comes against you, it will also show up on your credit report and the relevant entries will remain there for the next seven years, not from the date of the final judgment but from the date when the lawsuit was filed against you.

Unpaid Tax Liens

When you do not pay taxes on your properties, the government may seize the property and put it for foreclosure. The worst thing is that even if you lose your home or property in foreclosure, you will still be legally liable to pay the mortgage loan. If you make defaults in mortgage repayment, it will further damage your FICO score. The entries for paid tax liens stay on the reports for the next ten years while the entries for unpaid tax liens will stay for the next fifteen years.

Foreclosure Due to Non-Payment of Mortgage Loans

Your home may also be foreclosed by mortgage lenders if you keep making continuous defaults. Any such instance will remain active on your FICO report for seven years.

All these are some of the worst things that will seriously damage your credit report, affecting your ability to obtain new loans or credit in future.

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Posted in Credit Repair, Credit Reports | 1 Comment »

One Response to “5 Worst Things That Can Ruin Your Credit Report”

  1. Albert says:

    Very informative article, it tells very important and complicated facts in a very easy and simple way. Credit Report is a very important document, it is analyzed by the employer if you want a job or you are considered for a promotion in a field related to finance. If you are not punctual in making the repayment of your debts it will get entry in your report for the 7 years. It means your report will be affected very badly and you will not be getting loan or insurance at a low rate very easily. Creditors can contact to collecting agencies and the debt collectors can send their report to the bureau with in collection status. It will also affect the report. If you are not in a status to pay back the loan, creditors can file a case against you and the judgment will also make an entry in your report for seven years. Unpaid loans unpaid faxes are not going to leave you safe. If you have a mortgage loan and you are unable to pay back, it will affect your credit score. They will try to ruin your credit report, it depends upon you how you can save yourself.

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