Negative accounts on your credit report can have a snowball effect on different areas of your life. To begin with, you have negatives such as charge-offs, collection accounts, late payments and the worst being foreclosures and bankruptcies.
These negatives will in most cases stop you from securing financing on different day-to-day needs such as cars, apartments and consumer credit to name a few. In some cases you will find that you can receive financing but the problem is that the interest rates will be ridiculously high!
For example, with a car you can expect to pay an interest rate as high as 20% which is not too good. This now affects the options of cars you can choose from because most of your monthly payment will be going to interest as opposed to the original price of the vehicle.
Unfortunately your credit rating is also being tied to other things such as car insurance and even employment. You will find that a negative rating will cause for your insurance premiums to be higher. Certain employers will also turn to your credit rating to finalize your employment and if it's not good, you may be denied employment.
Buying a home also becomes a lot more difficult with negative accounts on your report to the point where it's almost impossible!
The better option rather than to do nothing to to fight back. You can do this by auditing the information on your credit reports (Equifax, Transunion and Experian reports) to make sure that the negative items are all verifiable. If they cannot be, they would need to be removed from your reports.