Having a delinquent account(s) is not the end of the world. It’s simply intended to be a warning that you’re behind on your payments and need to catch up. You can still maintain a decent credit score with a late or delinquent payment in your history.
Follow these steps to counterbalance and remedy the impacts of delinquent debt on your account.
1. Prioritize Making Delinquent Payments
If your credit account has been delinquent for more than 30 days, the first thing you should do is make your overdue payment(s) as soon as possible — don’t let them spiral out of control. The sooner you can start making payments, the sooner you’ll get out of delinquency and back on track.
2. Contact Your Lender
The best next step is to reach out to your lender to begin the recovery process. If you need help paying off a delinquency, try to work out a payment plan with the creditor or ask about hardship programs that could help in the case of temporary income loss or other financial setbacks. You can also inquire about credit card or loan forbearance programs that can help you get back on your feet.
3. Contact the Debt Collection Agency
If your delinquent debt has already gone to collections, contact the debt collection agency and try to work out a payment plan. The debt collector can explain your options for repayment, such as a lump-sum payment or a plan to pay off the debt over time. Know your rights, as the Fair Debt Collection Practices Act (FDCPA) gives consumers protections at the federal level, and most states also have laws about debt collection practices.
4. Commit to Making On-time Payments
Going forward, if a late payment caused your credit score to drop, the best thing you can do is to continue making on-time payments on all of your accounts. After a few months of consistent on-time payments, your credit scores could slowly improve.