How do I raise my credit score after debt settlement?

Date Posted: September 10, 2022
By: Maggie Marques

How do I raise my credit score after debt settlement? Now that you have settled your debt, you may quickly think about how to erase this in your credit report. Your debt settlement may stay up to seven years in your credit report, but you can start improving your credit score to prove that you are in financial health is better.

Remember that you did not reach this point of settling your debt instantly, and getting out of it will not be instant as well. Don’t lose hope, though, because slowly but surely, you’ll be able to get through this. Here are some steps you can take:

Checking and disputing errors in your credit report regularly. Don’t take checking your credit report for granted. This paper will give you a factual scenario of your financial health. Be aware of your payment history, credit utilization, credit history, and credit checks. Regarding credit utilization, try to go below a 30% ratio as much as possible and try your best to make full payments and pay your debts on time.

If you see mistakes and entries that shouldn’t be on your report anymore, no matter how small, file a report and dispute it. You may think that a single late payment (even if you paid on time) will not have an effect or even a wrong address and other inconsistencies, but it does and will affect your credit report.

Keep old accounts open. Suppose you have four credit card accounts, and everything is maxed out. Slowly, you have been repaying, and finally, you are down to the last two accounts. You may think the goal is to pay everything up (correct) and close all accounts (wrong). Credit bureaus want to see how well you manage your accounts. Maintaining two different credit accounts with low credit utilization ratios will tell the lenders that you are good at managing your credit. The longer you have the credit card account, the better; canceling it will lower your credit score.

Credit rebuilding will take time, and it will test your patience. You have to commit to putting a lot of hard work into it, and before you know it, you are well on your way to being financially healthy. Creditors look favorably on paid-off debts. How do I raise my credit score after debt settlement? Now you know what to do, start your journey towards financial health one step at a time.

 

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