What are the main negative items on a credit report?
There are several factors that negatively impact your credit score. We will take a closer look at the following:
- Late Payments
- Collections
- Charge Offs
- Liens
- Bankruptcies
- Foreclosures
- Judgements
- Repossessions
Late Payments
We all know or have experienced late payments. One late payment can decrease your scores by 15 to 40 points and multiple will crush anyones credit standing. Some lenders, when it comes to purchasing a home, will deny a mortgage application just based on late payments, even if your scores are high enough to get approved. Let’s address how to tackle late payments.
Send a dispute to the credit bureaus.
By disputing directly with the Credit Bureau they are forced, under the FCRA, to verify its accuracy with the credit furnisher. The more late payments you have the more difficulties it is to get removed. We would recommend if you have multiple late payments and decide to send a dispute letter to just focus on one at a time.
Goodwill Adjustment
This may be the best path for removal of late payments. This is because they are usually open accounts, which makes it easier for the credit furnisher to verify so the dispute process has a lower percentage of deletion. You can either send a goodwill letter or call them directly. Be sure to impress your relationship with their organization and ask for a one time late payment removal. You will have a higher likelihood of success for late payments that are 60 days or less. Also, if you have multiple late payments the credit furnisher is unlikely to remove them.
Key to success
Late payments have a large negative impact on your credit score and if you are determined to fix your credit they have to stop. One simple tip is to set up automatic payments to ensure they do not keep recurring.
Collections

The majority of Americans, at some point or the other, have experienced a collection on their credit report. A collection is basically a debt that a third party debt collector has purchased for pennies on the dollar.
Remember, through the Fair Debt Collection Practices Act (FDCPA), you have rights. They are not allowed to call you except between the hours of 8:00am to 9:00pm or making excessive phone calls.
If you feel you are being harassed or have been served papers from a collection company contact Legal Counsel. We recommend Vice & Henley, PLLC. They can be contacted at the following email address:
collectiondefense@vicehenleylaw.com
Charge Offs
A Charge Off is a negative account on your credit profile from a creditor that writes off an unpaid debt. By writing it off they can no longer collect on the bad debt. They have the option to sell it to a collection company which will have a larger negative impact on your credit score. If you can pay the charge off before it goes to collections would be the best path, but most can’t. If you can always ask for a pay for deletion, creditors are not required to delete but you should always ask. Just know that paying a Charge Off usually does not help your credit score.
Liens
Liens are the result of unpaid taxes and can stay on your credit report indefinitely. If you are able to pay off the Lien it will still stay on your report for up to seven years, so you will need to file an Application for Withdrawal of Filed Notice of Federal Tax Lien (IRS form 12277). This is the only way to get it removed once paid.
Bankruptcies
If you’ve had a hardship and bills are piling up you probably have thought about bankruptcy. Remember filing bankruptcy will negatively impact your credit score for 7-10 years. Just because your debts are included in a bankruptcy does not mean they cannot go on your credit report. Also, you will have to wait at least 3 years in some states to get a home loan once the bankruptcy ends. We recommend you contact a Bankruptcy Attorney to ensure you understand all the ramifications of filing.
Foreclosures
Foreclosures create long term damage to your credit report. If you are concerned about getting behind on your mortgage payment take swift action. Call the mortgage company and review all available options so you do not have to go through the legal process and eviction that results from a foreclosure.
Judgements

A judgement is issued by the court against a debtor, filed by a collection company in civil claims court. By law you have to receive a summons to court so you have time to raise a defense. Remember paying a judgement does not remove it from your credit report, but reflect that the judgement was satisfied.
If you feel you are being harassed or have been served papers from a collection company contact Legal Counsel. We recommend Vice & Henley, PLLC. They can be contacted at the following email address:
collectiondefense@vicehenleylaw.com
Repossessions
Most associate a repossession with an automobile, it is basically a loss of any property that has been purchased through a secured loan. Of course it has a negative impact on your credit score. The main point we want to stress is a Voluntary Repossession. We have a lot of clients state, “But I turned the car in”. Whether you voluntarily turn the car in or they come get it has the same impact on your credit score. It will report as just a repossession. If you feel you are getting close to a repossession call the credit furnisher and do your best to work something out before it escalates.
Medical Collections
In the past Medical Collections were viewed the same as any other type of collection. Things have changed due to credit furnishers' view that medical bills are a poor indicator of an individual's credit worthiness and some credit calculations are now representing those changed views.
At this point FICO 9 basically ignores medical bills on your credit profile when calculating your credit score. Also, most lenders will not use any medical bills in their Debt-To-Income calculation when approving your for a home loan.