DEFINITION of 'Negative Information'

Data in a consumer’s credit report that lowers his or her credit score. Negative information includes items such as late payments on loans and credit cards, delinquent accounts, charge-offs, accounts that have been sent to collection, bankruptcies, short sales, deeds in lieu of foreclosure, and foreclosures.

Credit reports also contain positive information such as on-time payments and loans that have been repaid in full.

BREAKING DOWN 'Negative Information'

Negative information will hurt your ability to get the best credit cards and the best loan terms. Too many negative items or even one severely negative item can mean that you won’t qualify for a credit card or loan at all. Negative information will eventually leave your credit report, but the amount of time it takes depends on the item. Foreclosures remain on your credit report for seven years, while completed chapter 7 and chapter 11 bankruptcies stay on your credit report for up to ten years, and chapter 13 bankruptcies stick around for up to seven years. However, having other accounts in good standing will reduce the impact of negative items over time, even before they drop off your credit report.

If your credit report contains negative information that’s false, you should contact the credit bureau and try to get the negative information removed. You might find yourself in this situation if the credit bureau makes a mistake, if one of your lenders or creditors makes a mistake, if your identity is stolen or if someone else’s account gets mixed up with yours. If your credit report contains negative information that’s a result of financial mistakes or hard times, a combination of positive items and the passage of time will improve your credit score.

In addition to negative items, certain risk factors can drag down your credit score. If you’ve opened too many new accounts recently, don’t have a mix of different types of credit, your credit history is very short or you’re using a large percentage of your available credit, your score will be lower than it could be if you had a long credit history, no or few new accounts, several different types of credit and a low credit utilization ratio.

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