Negative Credit Items
Having trouble getting credit for a new car? Turned down for a credit card or mortgage? Here are some of the most common negative credit items that may appear on your consumer credit report to keep you from earning the credit you deserve.
Late Payments:
A late payment in credit terms is a payment made after the posted due date. Your creditor sets the date your payment is due and anything received after that date is subject to late fees and may cause an increase in your interest rates on that account and any others that check your credit history. For more information about late payments and how they affect your credit, see Late Payments.
Charge Off:
A charge off is an accounting entry made when a creditor decides they no longer believe the balance owing on your account will be paid. They write off the balance and no longer claim it as an asset. The debt still exists, but the original creditor may not pursue collection any longer. For more information about charge offs, go to Charge Offs.
Repossession:
Repossession is a legal means for a lender to take back the property they sold you when you fail to meet the payment terms. If you fail to make your payments on time or don’t make them at all, the creditor who owns the contract on your vehicle or other financed merchandise may exercise their right to take back the item until you make good on your debt. To learn more about repossession, check out Repossession.
Foreclosure:
Foreclosure is a legal proceeding initiated by a mortgage lender when a borrower fails to make their house payments in accordance with the contract. If you are several months behind on your payments, your mortgage company may take you to court to have you legally removed from your home and take back the property unless you can become current on your payments. Read more about Foreclosure.
Bankruptcy:
Bankruptcy is a legal method for consumers to declare themselves incapable of paying their bills and preventing creditors from forcing them to pay. A bankrupted consumer is declared by the court to not have the money to meet their financial obligations. There are two ways for the average consumer to file bankruptcy and it is important to know that not all types of debt are eligible for discharge. For more information on bankruptcy and its effect on credit history, see Bankruptcy.
Find out how Lexington Law Firm can help you erase bad credit from your consumer credit report.