Negative Items On Credit Reports

June 26, 2012 by  Filed under: Credit 

The information contained in your credit report is supplied by creditors whom you have past and present accounts with. All activities that have an impact on your credit are reflected in the credit report and form part of your credit history.

Credit history is used to evaluate the creditworthiness of a borrower. This creditworthiness is often represented by a credit score. A low credit score is representative of a borrower who does not have a good reputation when it comes to paying his debts while a high credit score signifies a borrower who knows how to pay his debt well. Some financial institutions would consider a credit score of 620 high and anything under that is low. Whether a credit score is low or high is entirely dependent upon the policy of such financial institution and the nature of the credit that the borrower is trying to get.

When a borrower applies for a loan, financial institutions use the information in the credit report in deciding whether or not to grant the loan. It is through the credit report that banks learn about the credit accounts and loans a person has made over the years including the ones that have been right off due to insolvency or inability to pay. Anything that results to default, late payments, bankruptcy, foreclosures and charged off accounts will appear in the report under negative items. These negative items can really put a damper on prospective lenders when it comes to lending you money. Generally, no one would like to lend someone who has been tagged as non-paying.

But does having negative items in your credit history mean the end of your credit reputation? Definitely, you still have a chance to improve your reputation as a borrower. By making prompt payments and settling past dues, your credit score can improve over time. Negative items can stay recorded for 7 years with the exception of some negative items such as bankruptcy which stays in your record for 10 years. However, if you exert conscious efforts in improving your credit report, you will be able to see favorable results in time.

Not all negative items are caused by delayed payments and inability of the borrower to pay. There are times when errors occur. What with all the millions of data being processed everyday, it is not impossible that mistakes will be made along. When you spot something in your credit report that you think should not be there, you can write a letter to the credit bureau to demand correction of such item. The three major credit bureaus are Equifax, Experian, or TransUnion LLC. Although there are other credit bureaus that have access to your credit information, you may choose to write to these three major credit bureaus.

The creditor is expected to respond to your letter of complaint within 30 days from receipt of notice. Failure to respond within 30 days shall result to the removal of the item in question regardless if it was truly a mistake or indeed a negative item.

The author gives advice when it comes to getting credit reports in South Africa. To read more visit

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