Improve Your Credit Score One Step At A Time - In the United States (USA) more than 30 million people have a credit score of 620 or below, making them unavailable to get a reasonable loan with average interest terms. If you are in this situation, you should follow the steps below to gradually improve your credit score.
- Pay your credit card bills and all bills on time
- Pay down your current debt, and spend less on credit cards
- Keep credit card accounts open, but pay them off
- Do not open multiple credit lines at one time
- Consider debt counseling
- Avoid bankruptcy, if possible
Filing for bankruptcy can take 200 or more points off the score of someone with good credit. People with multiple delinquencies or collections will see a decline much less than 200 points. Recovering from a bankruptcy can be very difficult as it stays on your credit score for 10 years. Once a FICO score drops below 620, credit availability becomes very difficult and far more expensive. Lenders specializing in high interest or sub-prime loans love recent bankruptcies, because they know consumers in the United States cannot file bankruptcy again for another six years, which is plenty of time to enforce a lot of high interest payments. |
