2010/11/14

Six Items Or Remarks That Are On The Hate List Of Your Credit Report Score

There are certain negative items and remarks that are not good for the health of your credit report score. They can significantly damage your credit history. That is the reason why experts repeatedly recommend consumers to check their credit reports at least every six months. Dispute must be filed immediately as soon as you find any errors or mistakes. Following is a list of six things that are on the hate list of your credit report.

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Court Judgments And Lawsuits

If you are making defaults on a loan account, creditors have the right to file a legal lawsuit against you and seek help from court to recover the debt. If the judgment comes against you, a remark specifying the same will be added on your reports, which will stay there for up to a period of seven years.

Tax Liens

Governments are sometimes referred to as the worst debt collectors, especially when it comes to collecting taxes. Your property can be seized and then sold in auction if you do not pay the property taxes in time. Remarks regarding these tax liens are also added in your report and stay there for up to fifteen years, which eventually damages your credit report score significantly.

Foreclosures

Even your mortgage lenders can size your property and sell it in an auction if you fail to make the mortgage payments in a timely manner. This process is known as foreclosure and the entries specifying the same remains on your report for around seven years, making it very difficult for you to obtain new credit.

Bankruptcy

Bankruptcy is one of the worst things that can happen to a credit report. Though filing for bankruptcy in extreme cases can help a debtor get rid of the overwhelming debts and allow him/her to give a fresh start to his/her financial life, the credit life becomes very difficult for a bankrupt individual. It stays on your credit report score for at least 7-10 years. Therefore, it is always advised to avoid bankruptcy as much as possible, but in case you have no other alternative, you must at least start rebuilding your credit history once your debts get discharged.

Debt Collections

When you fail to pay the installments on a loan for a period of at least six consecutive months, lenders can transfer your account to a collection agency. A loan account in collection status is also reported on your credit report, which also affects your FICO score negatively.

Charge-Offs

Sometimes, when lenders are unable to collect debts despite all their efforts, they simply charge-off your debt account, which means they assume that the debts are not collectible. Though it may look like great news to you, it reduces your credit score and sends a very negative impression to your future lenders.

The above six things can have the worst effect on your credit report score. The biggest problem is that the negative effects remain for several years. Therefore, you must plan everything in a way to avoid such possibilities. And, the best way to do this is to make yourself financially disciplined by always on time with your bills and debt payments.

Filed under Credit Repair, Credit Reports