Restore Your FICO Score – Part Three

March 8th, 2010 | Debt, Goal, Money, Personal Finance, credit score

In the previous parts of this article we discussed how FICO score can impact your financial status as well as the initial steps that you can take to begin restoring your FICO score. We covered handling collections first since they do have a big impact on your overall score, but there are a few other ways that you can quickly see a big jump in your score.

After you have the collections on your account either settled or verified, double check to make sure that they were removed from your credit report. If a collections agency agreed in writing to remove the entry upon payment and did not, you can send copies of the letters and your cancelled check to the credit bureaus to have it removed by them.

Now that collections are out of the way, let’s move on to more ways to restore your FICO score. If you have abused your credit in the past, opening a new card can be difficult. Establishing a good payment history is one way to get a bounce of 30 or more points on your FICO score, but that can be tough if you can’t get any new credit.

Open up a secured credit card and use it once a month for a small purchase. (Here are some bad credit credit card recommendations.) Pay that off completely before the due date. After six months, you should start to see a change in your FICO score. Keep the balance on that card as low as possible to show that you are utilizing your available credit wisely. The lower your debt to limit ratio is, the better your FICO score will be.

Continuing on that theme and assuming that you still have accounts that are open, start paying those balances down each month and stop using the cards. You do not want to close the credit card accounts, since a closed account may actually reflect poorly on your rating. But, that doesn’t mean that you have to use them either. Keep paying on them each month, and try to shoot for paying more than the minimum balance requirement. This will help you chip away at a high balance and lower your debt to limit ratio nicely.

It can typically take anywhere from six months to two years to completely restore a FICO score, depending on your personal situation and just how badly in debt you are. However, with diligence and time, that score will change for the better. The key is making your payments on time, freeing up your balances and keeping an eye on any collection efforts.

It is also a good idea to read through the Fair Debt Collections Practice Act, especially if you are dealing with creditors. They do have rules that they have to follow, but it’s up to you to know your rights. This act will protect you from harassment, but only if you take action. Take the time to read through it, and don’t be afraid to tell a creditor that you will report them if they overstep their bounds.

Photo Credits: 1

Originally posted 2008-09-30 05:16:02. Republished by Blog Post Promoter

Related Posts

6 Easy Tips on Raising Your FICO Score In today’s world, it’s easy to define your self worth by your FICO score. Whether you are trying to buy a house, get more credit or just get back on the right track, a low FICO score can really impact your entire life. However, there are some easy steps that......
The Truth about Credit Cards and Debt pt 2 This is part two to a series on credit cards and where our country is heading when it comes to credit card debt. In the previous post in this series we talked about some of the statistics in the credit industry and how to interpret them to get an idea......
TransUnion Reveals National Credit Card Debt on the Rise TransUnion.com, one of the three major credit bureaus, released the results of an analysis study of the trends in credit card lending specifically for the third quarter of 2008, revealing that credit card debt is on the rise. The report is one part of an ongoing series of quarterly consumer......
Get Rid Of Your Credit Card Debts Credit card debt consolidation is a quite effective option of eliminating your credit card debts. Getting into credit card debt is really harmful for your credit score. It is even worse if you let it accumulate. At present, an average American household carries credit card debts of over $8,000 which......
Debt Warning Signs and How to Get Out Over the past decade, an insane amount of debt has been wracked up. Household debt has significantly eaten up a slice of personal income since around the mid 90s. Here are four clues that you are carrying too much debt: Clue 1 - Your debt to income ratio is too......

Related Websites

Meeks Bay Marina, Lake Tahoe Meeks Bay Marina is located on the west side of Lake Tahoe Phone: (530) 525-5588 Fuel Dock: No fuel is available at this location. However, there are numerous other marinas that do have fuel docks if you need this service. Pumpout: Yes, a pumpout service is provided. Services Available:......
Starting a State Quarters Collection If you have an interest in coins or coin collecting, but you are not really sure where the place is to get started, why not consider starting your own unique state quarters collection? Collecting coins, especially starting a state quarters collection is a hot topic right now, at least as......
Collecting Stamps as an Enjoyable Hobby When people are just starting out, the idea of stamp collecting can be relatively confusing. This is because it can be difficult for starters to distinguish regular stamps from valuable ones. Collecting stamps is a truly enjoyable hobby, however, so many more serious collectors recommend that the best possible way......
Caring for Doll Collectibles The term collectible refers to just about anything that you can imagine, as long as it is something that can be collected, and something that holds value to someone, somewhere. For example, many people enjoy doll collectibles, so much so that doll collectibles are some of the most popular collectibles......
Tips for a Sport Collection Collecting a memorability sport collection is something that can be truly exciting as a hobby and also truly profitable. Perhaps you have always had an interest in sports, or perhaps you just love collecting items of value. If you are interested in creating your own sport collection, you need to......