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.

BREAKING DOWN '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 Report

    A detailed report of an individual's credit history prepared ...
  2. Negative Information

    Data in a consumer’s credit report that lowers his or her credit ...
  3. Credit Denial

    The rejection of a credit application by the prospective lender. ...
  4. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  5. Credit Application

    A request for an extension of credit, either orally or in written ...
  6. Consumer Credit

    A debt that someone incurs for the purpose of purchasing a good ...
Related Articles
  1. Taxes

    Bankruptcy Consequences

    You've done the deed and are out from under your debts – or embarked on a repayment plan. What consequences can you expect and how long will recovery take?
  2. Personal Finance

    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.
  3. Personal Finance

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  4. Investing

    Buying a House After Bankruptcy? It Is Possible!

    Buying a house after bankruptcy is not impossible. It just takes time to repair your credit score and demonstrate you're a good risk for a mortgage.
  5. Personal Finance

    Which Is More Important: Credit Report or Credit Score?

    Here's the difference between a credit report and credit score, and which is more important.
  6. Personal Finance

    Take the Right Steps to Build Excellent Credit

    There are several things you can do to protect and improve your credit score.
  7. Personal Finance

    Why You Should Improve Your Credit and How to Do It

    With credit playing a big role in many financial decisions, it is important to maintain good credit.
  8. Personal Finance

    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.
  9. Personal Finance

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  10. Investing

    5 Ways Bad Credit Screws Up Your Life

    When your credit score slumps, many other things in your life can also start to slide downward. How to recognize the situation and start dealing with it.
RELATED FAQS
  1. Is credit counseling as damaging as bankruptcy on my credit report?

    Learn whether credit counseling is as damaging as bankruptcy. Bankruptcy wipes out all debts, but it can cut you off from ... Read Answer >>
  2. How long does information stay on my credit report?

    Understand how long different types of information stay on your individual or business credit report according to the rules ... Read Answer >>
  3. What information do lenders need when I apply for a credit limit increase?

    Increase your credit limit by making sure your current credit is paid on time and by paying the largest amount you can afford ... Read Answer >>
Trading Center