Ask Money

Defaulted debt made good. Now what?

Chris Farrell Mar 29, 2011

Question: I was just served notice that my erstwhile defaulted student loan has FINALLY been settled-in-full. It was a really long road to get to this point and it’s a really good feeling. So now what? Am I supposed to shop this paid-in-full letter around to the credit score people? I never thought this day would come so naturally I never planned for it. Happily and sheepishly. Jay, Cherry Hill, NJ

Answer: Enjoy the moment. You earned it.

Then I would check your credit reports from the three major credit bureaus, TransUnion, Experian and Equifax. You want to make sure all three have the correct information.

By federal law, you can get a copy of your report from each bureau for free once a year. There is only one authorized provider of the service, AnnualCreditReport.com. (In other words, ignore TV ads, email offers, and online search results that come up with a different provider offering “free” credit reports. They’re trolling to sell services for a fee.)

Your credit score will improve with the passage of time and good debt repayment habits. It has probably already gone up from the efforts you made to pay the student loan debt tab. Older credit history doesn’t count as much as more recent information. Any bad marks disappear after 7 years anyway.

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