Defaulting on a credit account can be a damaging situation for your credit score. While this can set your credit score back, you can recover from it with the right actions. Taking steps like making regular payments and paying down your other balances can help the recovery effort.
Pay the Balance
When you default on a credit account, this does not necessarily mean that you should give up on trying to pay the debt. If you come up with the money to make payments, you should still try to repay the credit account that you defaulted on. This will show creditors an act of good faith on your part and it shows them that you are willing to repay your debts, even if you are a little late.
Payment History
Besides paying the balance on your defaulted account, you should also place an emphasis on your future payment history. Even though you may not have been in the habit of always making your payments on time in the past, making it a priority to do it from this point forward can make a big difference in improving your credit score. Focus on all of the accounts that you have in good standing and make your payments on time. Eventually, your credit score will start to improve.
Credit Report
During this process, it can be beneficial to get a copy of your credit report. If you do not know what your credit report says, it can be difficult to build up your credit score again. You need to see which accounts are in good standing and which accounts have negative reports on them. You can get a free copy of your credit report every year from each of the three major credit bureaus, TransUnion, Experian and Equifax.
Negotiation
When you repay your defaulted accounts, you may be able to negotiate with the creditor to help your credit. In some cases, they are willing to remove any negative statements on your credit report if you pay your account within a certain amount of time. While they may not be able to completely build your credit back up, this step could definitely help.
Warning
There are companies in the market that sell credit repair services. These companies promise to take care of everything for you and get your credit back on track. While some credit counseling services are legitimate, many of them are scams. When choosing a company to help, you should check with the Better Business Bureau as well as other online reviews so that you do not sign up with an illegitimate company.
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