Derogatory Information

AAA

DEFINITION of 'Derogatory Information'

Information on a person's credit report that can be legally used to turn down a loan application; it includes late payments, charge-offs and bankruptcies. As a general rule, derogatory information remains on a person's credit report for seven years; but there are exceptions, including bankruptcies, which can remain for 10 years.

INVESTOPEDIA EXPLAINS 'Derogatory Information'

Various federal laws and statutes protect consumers from unfair denial of credit. Under the Equal Credit Opportunity Act, credit applications cannot ask applicants their sex, race, color, religious affiliation or national origin. Creditors can ask applicants how old they are for certain purposes; however, they cannot use age to deny credit to applicants older than 62. Under the Fair Credit Reporting Act, consumers have the right to review their credit reports and have wrong information corrected. Disputed information that cannot be verified must be deleted from the person's credit report.

RELATED TERMS
  1. Credit Score

    A statistically derived numeric expression of a person's creditworthiness ...
  2. Credit Report

    A detailed report of an individual's credit history prepared ...
  3. Credit Card

    A card issued by a financial company giving the holder an option ...
  4. Credit

    1. A contractual agreement in which a borrower receives something ...
  5. Charge-Off

    A term describing an expense on a company's income statement. ...
  6. Soft Inquiry

    A credit report check that does not affect an individual's credit ...
Related Articles
  1. Credit & Loans

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.
  2. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  3. Credit & Loans

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  4. Home & Auto

    5 Steps To Scoring A Mortgage

    Find out what you can do to polish up some of the common flaws that put off lenders.
  5. Credit & Loans

    The History Of Consumer Credit Rights

    The Fair Credit Billing Act of 1974 gave consumers the power to dispute credit card charges.
  6. Credit & Loans

    Why Your Credit Report Errors Will Now Be Easier To Fix

    Equifax, Experian and TransUnion have reached an agreement to make changes to how they handle credit report errors and unpaid medical bills.
  7. Credit & Loans

    Meet The Company Behind Your FICO Score

    There are other credit scores that evaluate lending risk, but FICO is still the choice of most U.S. lenders.
  8. Credit & Loans

    Terrible Credit Score? Try These Credit Cards

    When your credit is less than stellar you have fewer choices. But some are still better than others. Here's our read on which cards to get.
  9. Credit & Loans

    What are the Five C's of Credit?

    The five C’s of credit are what banks and other lenders evaluate about a potential borrower when making a lending decision. The five C’s are Character, Capacity, Capital, Collateral and Conditions. ...
  10. Credit & Loans

    5 Things You Need For A Good Credit Score

    How good a credit score you have depends on 5 factors. What they are and what it takes to better your credit rating if it's not as high as you'd like.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center