Having a negative credit history means you have several pieces of negative information on your credit report – a document that contains details of your payment and account history with creditors and lenders.
Several things can hurt your credit, but a negative credit history is most often caused by severely delinquent accounts like late payments, debt collections, charge-offs, repossession, foreclosure, judgments, tax liens, or bankruptcy on your credit report. These all come from missing payments on your accounts.
How to Tell If You Have a Negative Credit History
Checking your credit score is the best way to gauge your credit history. Your credit score is a number that grades the information in your credit report. The lower your credit score, the worse your credit history will be.
FICO scores – one of the most used versions of your credit score – range from 300 to 850. Scores on the lower end of the range, usually lower than 650, indicate a negative credit history. The VantageScore is another type of credit score, ranging from 501 to 990. The VantageScore gives a letter grade, similar to a school grade, along with the credit score number making it easier to tell what your credit score means.
Your credit report is the second part of investigating a negative credit history since it’s the document that includes the negative details. Consumers in the U.S. are entitled to a free credit report every year. You can get your free reports from the three major credit bureaus – Equifax, Experian, and TransUnion – through AnnualCreditReport.com. Otherwise, you can purchase a credit report from the credit bureaus or myFICO.com.
Improving a Negative Credit History
Accurate negative details can stay on your credit report for up to seven years (or 10 years for bankruptcy). If the information blemishing your credit history is inaccurate, you can dispute that information with the credit bureau to have it removed.
You might be able to remove negative things from your credit history with a pay-for-delete or goodwill letter. The former is a request to remove negative information in exchange for payment and the latter is a request to remove negative items as a matter of goodwill. Businesses do not have to remove accurate negative information from your credit report as long as those items are within the credit reporting time limit. Even paying a delinquent account doesn’t change the fact that you were once delinquent.