It’s no secret an excellent credit score comes with many financial perks. It can help you qualify for the loans you need and pay less interest on the funds you borrow. Good credit also makes renting an apartment easier and can even earn you discounts on your car insurance. However, how much do negative marks on a credit report matter?

While building and maintaining a great credit score should always be a priority, mistakes happen. Some mishaps are more severe than others and can impact your credit rating for much longer. Understanding which items carry more weight on your score will help you avoid them in the future.

The Impact of Negative Marks on a Credit Report

Not all negative marks have the same consequences. Some may have only a minor and temporary effect. Here are four common items that can negatively impact your credit score.


Late or Missed Payments

Your payment history has the most significant impact on your credit. It makes up 35% of your score. As a result, you should always work to pay your bills and make your loan payments on time.

How Long Do They Last: Late or missed payments can be negative marks on a credit report for up to 7 years.

What You Can Do: Avoid missing payments by setting reminders for bills and loan payments on your phone. Even better? Set important payments like your rent, mortgage, and car loan on autopay. If you don’t think you can make a payment on time, reach out to the company or lender BEFORE the due date. They may have solutions available that won’t impact your credit score, such as a partial payment.



A credit inquiry is when a company checks your credit report and/or score. There are two types of inquiries – soft and hard.

  • Soft inquiries are when a company pulls your credit, sometimes without your knowledge. These types of inquiries are commonly used by financial institutions when sending you pre-approved offers. Other examples include background checks for employment or when you apply to rent an apartment. Soft inquiries do not affect your credit score and should not show up on your report.
  • Hard inquiries are when you apply for a loan and give a lender authorization to pull your credit. Hard inquiries do impact your credit score and will show up on your credit report.

How Long Do They Last: Each hard inquiry can remain on your credit report for up to 2 years.

What You Can Do: An inquiry is a mark that does NOT carry significant weight. If you are applying for a loan, such as a car loan, the impact will be minimal and temporary. However, inquiries can become more significant if you frequently apply for loans or credit cards.

Also, if you apply for several loans or credit cards in a short period of time, lenders may believe you are in financial trouble. It’s best to only apply for credit when necessary.


Collections, Charge-Offs, Repossessions, Foreclosures

If you don’t repay your loans on time, your account may move to collections. The lender will try to work out a payment plan with you or take other measures to collect on the debt if this happens. If the loan has collateral, such as a car or house, they will often repossess the vehicle or foreclose on the home. If the loan doesn’t have collateral, such as a personal loan, they may charge off the loan and use the courts to recoup their losses.

How Long Do They Last: Collection items can be a negative mark on a credit report for up to 7 years.

What You Can Do: If you’re facing financial difficulties, it’s always best to contact your lender as soon as possible. The sooner you let them know what’s happening, the more solutions they will have to help you. Lenders are more likely to work with you if you communicate with them. Fixes may include partial payments or restructuring your loan temporarily. This allows you more flexibility and helps you get back on track.



When all other financial options are exhausted, you may choose to file bankruptcy. This is the legal process of eliminating all or part of your current debts. Typically, you will be required to repay a portion of your debt utilizing a payment plan.

How Long Do They Last: Whether you file Chapter 7 or 13, a bankruptcy can remain on your credit report for up to 10 years. 

What You Can Do: Filing for bankruptcy is one of the most harmful items you can have on your credit report. While it may seem like your only option if you have significant debt, other solutions may be available. Before deciding to file bankruptcy, always seek the guidance of a financial advisor and attorney first.

If you do file for bankruptcy, immediately start repairing your credit score afterward. Your credit score won’t improve right away, but actively working to rebuild your credit will help in the long run. For example, you may need a car loan in a few years. If a lender can tell you’ve been working to rebuild your credit and manage your money responsibly, they will be more likely to work with you. You may not get the lowest rate at first, but you can always look to refinance a few years into the loan when your score comes up.

Ways to Rebuild Credit: Consider a secured credit card or credit builder loan from the credit union. Both are great options to begin the healing process to your credit. Money FCU also has free financial coaching available to help you make a plan and get back on track.



There are many benefits of an excellent credit score. However, getting there may sometimes feel overwhelming and confusing. It’s important to remember that even if you make mistakes along the way, that’s ok. Learn from the hiccup and keep moving forward.

The best thing you can do is ask for help early. If you can’t make a payment on time, let the company or lender know. Any solution that won’t impact your credit score is a plus.

Finally, remember that all negative marks on a credit report eventually come off your credit report with time.


Enroll in My Credit

As a Money FCU member, you have access to your free credit score and report! It’s free, and built right into your mobile and online banking account. It’s a great way to track how well you’re doing and what affects your score.

  • Get your free credit score once every 24 hours
  • Check your credit report for errors
  • Identify and dispute any incorrect information
  • Prevent fraud by setting real-time alerts
  • Get custom money-saving offers just for you
  • Use the Score Simulator to see what actions affect your score


We’re Here to Help!

Whether you’re just starting to build your credit history or you’re trying to rebuild your score, we’re ready to help. As your credit union, we’re here to answer all your questions and provide one-on-one financial guidance to help you reach your goals.

Call, chat, text or stop in M-F 9am-4pm ET. We’re here to help! (315) 671-4000.


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.