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.

RELATED TERMS
  1. Credit Score

    A credit score is a number ranging from 300-850 that depicts ...
  2. Credit Report

    A credit report is a detailed report of an individual's credit ...
  3. Credit Rating

    A credit rating is an assessment of the creditworthiness of a ...
  4. Bad Credit

    A qualification of an individual's credit history that indicates ...
  5. Credit Card Debt

    Credit card debt is a type of unsecured liability which is incurred ...
  6. Credit Reference

    Credit references can be a credit report or documented letter ...
Related Articles
  1. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  2. Investing

    How To Boost Your Credit Score To Save Thousands

    One of the first steps you should follow before buying a home is to boost your credit score. And how do you do that? Here, we tell you how.
  3. 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.
  4. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  5. Personal Finance

    How Bad Is My Credit Score?

    You've seen the number, but what does it mean? Here's how to assess your credit score and get to a better place if needed.
  6. Personal Finance

    The 5 biggest factors that affect your credit

    Are you in the process of getting a loans? Learn how credit companies use these factors credit companies rely on to determine whether to lend to you and at what rate.
  7. Personal Finance

    4 Habits That Damage Your Credit Score

    Many common money habits can affect your credit score negatively without you even knowing it.
  8. Personal Finance

    Why and How to Use Credit Cards Effectively

    When used responsibly, credit cards play a big role in establishing a good credit score that can help you obtain loans, mortgages and insurance.
  9. Personal Finance

    5 Extreme Ways To Raise Your Credit Score

    These methods are legal and legitimate - but are they worth it?
  10. Personal Finance

    Combining Credit For A Happy Financial-Ever-After

    A couple's finances may not always be a match made in heaven. Find out when to say "I Do".
RELATED FAQS
  1. What affects my credit score?

    Learn what affects your credit card and how your current balance and credit limit can affect your credit score? Read Answer >>
Trading Center