I met with an accident at work last year and was not able to work for a while. Now since 8 months I have had no contact with my creditors as I had moved abroad to stay with my aunt. I had a credit card debt of around $500 and a personal loan of $15000. Now since I have not made payment for long can anyone tell me what my credit records would be like? I know once I start working I will be able to repay. But I just wanted to know how bad will be my credit score now. Can anyone tell me how long will it take to get back to my previous score? My previous score was 762.
Hi Bjnm,
Since you have not made payments for a long time, it is likely that your creditors have charged-off your accounts. The debt amount will also increase because of the added interests and penalties (if any). But there is no need to worry. I am sure you will be able to get back your good credit records, once you start clearing off your debts.
To check your current credit score you can order a free copy of your credit report (available once annually) at "www.annualcreditreport.com". After you get back to work, you should contact all your creditors and collection agencies individually. You can try to work out a deal with them, by explaining that you have been through hard times. The sooner you pay off your debts, the better will be the impact on your credit records.
Good luck to you. :)
Increase credit score
Hi Bjnm,
Though a paid charge-off improves your credit records, but it is not likely to increase your score. The reason is that the charge-off will remain on your credit report, for 7 years from the date you became delinquent (even if you pay it off). But you must also note that creditors decision to approve your credit application, does not depend only on your credit score. They also review your credit records.
In order to increase your credit score, you should make timely payments for all your current bills. A good mixture of credit can also help to increase your score quickly. An installment loan along with a few revolving credit card accounts, will have a positive impact on your credit score. If you make regular payments for about 6-12 months, I think your credit score will increase.