What can I do to improve my credit score?
All of your debts, payments, credit card accounts and other financial history are used to compute your FICO credit score. All of the credit agencies calculate a score between 300 (extremely poor creditworthiness) and 850 (perfect credit). The average score is about 700. Your credit score is used by creditors to make a decision on applications for car loans, mortgages, credit cards, and other purchases.
If credit is granted, your score is often used to determine the interest rate on the debt.
- About 35%, of your score is determined by payment history. Missing payments or frequently paying bills late will drastically lower your score. You can significantly improve your score by making timely payments going forward, even if you have a history of late or missed payments.
- About 30% of the FICO score is based on how much money you owe versus how much credit is available to you. For this reason, it is rarely helpful to cancel credit cards that have a zero balance. A better strategy is to retain the card, but use it carefully and make all payments on time.
- About 15% of your credit score is based on the length of your credit history. The longer your credit history the better.
- The type of credit you use determines about 10% of the FICO score. Having many different types of credit, including mortgages, credit cards, car loans, etc. will likely generate a higher score.
- About 10% of your FICO score includes searches for credit. Applying for many different types of credit over a short period of time can lower your score.
CAN BANKRUPTCY HELP MY CREDIT SCORE?
Filing a bankruptcy case is not a cure all. In some circumstances, however, it may make sense to clear out old debt that you cannot pay so as to focus on rebuilding credit using debt that you can keep current. It is rarely a good idea to file bankruptcy just to help rebuild credit, but there may be other good reasons to file. In some circumstances, it is the only way to get a fresh start. The decision to file a bankruptcy case should be made only after consultation with an experienced bankruptcy attorney.
TIPS FOR REPAIRING YOUR CREDIT REPORT AND CREDIT SCORE
Download: Tips To Improve Your Credit Score
Download: the Budget Worksheet
Other Frequently Asked Questions:
- Can a Chapter 7 bankruptcy save my home from foreclosure?
- Can bankruptcy help my credit score?
- Can bankruptcy help with my income tax obligation?
- Can bankruptcy protect my workers compensation settlement funds?
- Can I discharge my old tax debt in bankruptcy?
- Can I file for social security disability while I’m still working?
- Can I receive workers compensation benefits if I was injured before or after clocking out?
- Can I save my home by filing bankruptcy?
- Can my re-enlistment bonus be discharged in bankruptcy?
- Can the bankruptcy trustee in my case seize the funds in my bank account?
- Chapter 13 Basics
- Chapter 7 Basics
- Get help filing your income tax returns — for free!
- How can I stop debt collectors from harassing me and my family?
- How do I decide if bankruptcy is necessary?
- How do I know if bankruptcy is the right choice for me?
- How does the foreclosure process work in Georgia?
- How long must I live in this area before I can file bankruptcy here?
- I cosigned a debt for a friend and now he won’t pay. What can I do?
- I was fired after being hurt on the job. Can I still file for workers compensation?
- I was injured at work. Can I sue my employer?
- I was terminated from my job after a work injury. Now my condition has worsened. What are my options?
- I’m considering filing a Chapter 13 bankruptcy. Do I have to include all my debts?
- I’m starting to think I may have to file for bankruptcy. Where do I start?
- Mortgage and debt relief for active military personnel
- My car has been repossessed. Can bankruptcy help me get it back?
- My Chapter 13 case was dismissed. Can I file a new case and protect my property?
- My doctor released me to light duty, but my employer is insisting I do more strenuous work. What should I do?
- My ex assumed our joint debts as part of our divorce settlement. Now he’s filed bankruptcy. What can I do?
- My house is being foreclosed – What can I do?
- My workers comp doctor has released me to light duty work. Can my employer cut off my weekly benefits?
- My workers compensation doctor says I can return to work, but I can’t do the job. What can I do?
- Ripped off by a debt settlement company?
- Social security benefits — Can a creditor garnish my bank account and seize my social security funds?
- The trustee has filed a motion to dismiss my Chapter 13 case. What are my options?
- What can I do to improve my credit score?
- What to expect: First credit counseling course
- What to expect: Free bankruptcy consultation
- What to expect: Second credit counseling course
- What to expect: Your next appointment
- When is my bankruptcy case closed by the court? Is it possible to reopen the case?
- Where would my bankruptcy case be filed, and where would the hearings be held?
- Will paying off an old debt raise my credit score?