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That's a negative entry ("derogatory" is a negative term; "key" suggests it is an important negative entry). I have heard about credit reporting agencies using "key derogatory" where they do not have information from a particular month on file. Specifically in relation to chargeoffs, this can to sometimes occur when the debtor disputes a charge-off appearing in a credit report, and the reporting agency changes the description from "charge-off" to "key derogatory" while they verify the information with the creditor.

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Q: What is key derogatory?
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"Tending to detract or diminish" "Disparaging; belittling: a derogatory comment." Derogatory. Ask.com. 26 November. Definition of derogatory


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