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How can I increase my score after clearing up bad debt?

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Joined: 20 Oct 2009
jennifer_hickey1's page
Posts: 1

38 Magic Points

Subject: How can I increase my score after clearing up bad debt?
Posted on Tue Oct 20, 2009 6:45 pm  

how fast can a person see their credit score increase after paying off bad debt?
I had bad debt, cleaned it up and settled with the bank in July. When can I expect to see the score increase?


Joined: 17 Jul 2006
Justin's page
Posts: 1238

28944 Magic Points

Posted on Wed Oct 21, 2009 5:24 am  

Hi Jennifer,

After you have cleaned your bad credit, you can find the updated credit report after 3 months. It is not exactly possible to say when your credit score will increase. However, with the improvement in your report, you will gradually come to see the difference in the score. If you had asked the bank to remove the negative item from your report, then it will little faster.

You can do a number of things to increase your credit score after clearing bad credit. Open new accounts and stay current on them by paying the bills regularly. If possible get a secured credit card and use it to purchase items and pay the bills regularly. Apart from these, you can become member of a credit union and can also get gas/store cards to use. However, always remember that the best way to build a good credit history is to pay the bills regularly and not to max out the cards.
All the Best Smile

Joined: 03 Nov 2007
goodnatured's page
Posts: 3931

439 Magic Points

Posted on Wed Oct 21, 2009 11:17 am  

I opened a few small store accounts, with low limits, like $250, I will charge around fifty and then pay the minimum until that small amount is paid off. I will usually pay around ten dollars a month. It builds a history. So far this has worked for me.

One increased my credit to around $750, I am still treating it as though it has the smaller limit, my only use for these cards and accounts is to increase my score and that is it.

Joined: 18 Oct 2009
SIA's page
Posts: 62

2524 Magic Points

Posted on Wed Oct 21, 2009 2:44 pm  

Very important thing about credit score is-

When you're trying to rebuild your credit score it's important to get a comprehensive view of what is actually effecting it...

Your Credit Score is calculated with the following breakdown:
35% - Payment History
30% - Credit to Debt Ratio
15% - Credit History
10% - New Credit
10% - Credit Types in Use

If you excel in one area and lack in another, only fixing the areas which you lack are going to improve your score.

Joined: 18 Oct 2009
SIA's page
Posts: 62

2524 Magic Points

Posted on Wed Oct 21, 2009 2:58 pm  

I would like to add some points here-

Credit scores are an important tool used by lenders to determine the probability a borrower will repay his or her loan. The things which helps to improve credit score is as below-

1) Pay your bills on time - Payment history makes up 35 percent of your credit score.
2) Contact your creditors if you are having a hard time making payments.
3) Try to keep low balances on your credit cards - Outstanding debt accounts for 30 percent of your credit score. Keeping credit card balances below 30 percent of the limit will make your credit utilization ratio look better.
4) Avoid shifting your debt between credit cards.
5) Carefully study credit offers before accepting them.

Joined: 18 Oct 2009
SIA's page
Posts: 62

2524 Magic Points

Posted on Wed Oct 21, 2009 3:03 pm  

Once again I forgot to mention about credit cards. Usage of credit card in appropriate manner will help you. So its very important that everyone should you the credit card responsibly. Keeping balances below 30 percent is a start is very mportant but along with it you should also be careful to keep the number of cards you have in check, make all payments on time, occasionally use older cards, etc.

For additional assistance addressing their bad credit, another excellent resource for consumers are professional credit repair services. Professionals can provide their valuable expertise on important matters like legally disputing the questionable negative listings on your credit report and specific steps you may be able to take to make the most of your credit

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