If you are thinking about a tax refund anticipation loan, they may not be the…
When you get your credit report, you might not understand why you scores are how they are. The report breaks down your credit history but it isn’t very useful if there are terms on it you don’t recognize. Don’t worry; we defined them for you so you can become a credit report reading expert…
1. Derogatory Marks: A derogatory mark on your report means there is a negative factor connected to one or more of your accounts. This can include anything from late payments to collections and worse yet, judgments.
2. Delinquent Accounts: An account becomes delinquent when a cardholder misses their required monthly payments. Technically, being 30 days late makes an account delinquent, but it typically takes two months of missed payments before the information is sent to your credit report.
3. Late Payments: Late payments can appear on your credit report as 30, 60, 90 or 120 days of late payments. Not only do these negatively impact your score, they stay on your report, even when you make up those payments and often prevent your score from growing.
4. Charge Off: A charge happens when you go 90 days late or more and your account is closed with a balance remaining. Often times this can happen to prevent further interest and penalties on the account while you are still paying it off. Charge offs are a huge detriment to overall credit health and the ability to grow credit scores.
5. Collections: A collection appears on your credit report when your account is not being paid on time. The account is closed and sent to a debt collector. Even after you’ve settled or paid off your balance, collections can stay on your report for 7 years from the original delinquency date. This account can accrue interest on a daily scale.
6. Judgments: If the original debt it not paid, it can be bought by a lawyer and they can sue you to recover the debt – this is known as a judgment. The court enters a judgment against you if your creditor wins or if you do not show up for court. If successful, the attorneys can work to collect money from you by using wage garnishment, property attachments and property lines.