Derogatory Information

Posted in Finance, Accounting and Economics Terms, Total Reads: 387
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Definition: Derogatory Information

It is the unfavourable information about an individual or a firm's credit profile that can legally be used to down a loan application. These could be reporting of late payments, charge-offs and bankruptcy. By law, a derogatory information is attached to creditors profile for 7 years, there may be exception to this as well.


Such derogatory information lowers the credit score and ruins a person’s chances to receive credit.


Some examples of derogatory information are:

• Bankruptcy – When one is part of legal formalities to get a relief from debt or obligations.

• Foreclosure – Fallen behind loan payments and legal process is taking place for it.

• Collections - Because of missed payments, these are the account sold to third party collectors.

• Tax Lien – It occurs when one neglects of fails to pay tax debt on time.

• Civil Judgement – Related to civil lawsuits which require payment of damages

 

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