Repairing Your Credit Score after Debt Settlement

If you are in need of credit repair, debt settlement could be one of the culprits behind your low credit score. Debt settlement can be devastating to a credit score and cause many financial troubles. However, there are methods by which you can repair your score. 

Make Regular Payments

The most important factor in rebuilding your credit after a debt settlement is to start making regular payments again. Most likely, when you started getting into trouble, you started to make late payments and probably even missed some payments altogether. These are two ways of seriously damaging your credit score.

When credit bureaus calculate your score, 35 percent of the equation reflects timeliness of payments. That means that if you do not make it a priority to get back on a payment schedule, you will never be able to build your credit back up to the level that you want. Make your payments on time and in full every single month for yearsthis takes timeand your score will rise. 

Pay Down Balances

Many people with bad credit have several credit cards and store accounts that are maxed out. If this is true of you, you need to make an effort to pay down those balances as quickly as possible.

Another factor that makes up your credit score is the amount of money that you have available on your credit accounts. If you keep the balances below 30 percent of the total limit that they give you, the credit bureaus will bump your score up. Racking up maximum charges and leaving the balances on there month after month can have substantial negative effects on your score. 

Use Credit

Bear in mind that you still have to use credit in order to rebuild it. Many people get burned by credit cards and accounts and completely stop using them as a result. While this can be helpful when you are trying to pay off debt, it can actually hurt your credit score. Therefore, you should open and use a small credit account. Then pay off the balance every single month. 

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