Types

• Negative credit information may come from many different sources. The most common are credit cards and auto loans, but also include mortgage, personal loans, business loans, leases and any other type of loan made to a consumer.
  
  In general, negative credit information reported to the credit bureaus from these sources will remain on a consumer's credit report from three to seven years and can be as much as 10 years. In most cases, negative information stays on a credit report for seven years, plus 180 days. Repossessions are reported for seven years and bankruptcies are reported for 10 years.
  
  

Financing Effects

• Consumers with negative or derogatory credit may not be eligible for prime loan rates when financing large ticket items such as a car or furniture. Alhough they may not be qualified for a prime loan rate, they may nonetheless qualify for a high interest loan in which a substantial down payment may be required and most of the interest is captured in the early parts of the loan.
  
  

Leasing Effects

• Leasing an apartment, condominium, townhouse or home is usually dependent on employment status and credit history. Landlords routinely run credit checks to ensure potential tenants are trustworthy and are not in jeopardy of having their wages garnished, leaving them unable to pay the rent according to the lease agreement. Negative credit information constitutes an inability or unwillingness to pay what are deemed to be legitimate and proper debts.
  
  

Career Effects

• Employers may also run credit checks for much the same reason as landlords---to establish an individual's ability to honor and repay loans. From an employer's standpoint, those with too much debt could be considered to be a risk for embezzlement or at risk for wage garnishment. In either case, negative credit information signals an applicant's mishandling of their personal finances and therefore, untrustworthy with corporate funds or information. Negative credit information can be a deciding factor in not being tendered a job offer.
  
  

Removing Negative Information

• Negative information appearing on a consumer's credit report can be removed if it is inaccurate, appears past the credit reporting limitations or cannot be substantially verified by the reporting agency. In either case, consumers are given remedy by a process proprietary to each credit bureau known as disputing. A dispute filed by a consumer must be verified and explained by the reporting agency within 30 days or it must be removed by law.