REBUILDING CREDIT: GET THE BAD CREDIT SKELETON OUT OF YOUR CLOSET
Is a negative credit event like a bankruptcy or a foreclosure coming back to haunt you and your ability to get new credit? There is a way to fix this, though it will take time and planning to get you back in good standing with lenders.
If you’ve recently experienced a financial hardship or had a serious credit breach, letting time pass and taking some corrective action are two effective strategies for repairing the damage, according to a recent article in USA Today.
From banks to credit card companies, lenders use credit scores to evaluate the potential risk in lending money to someone, and scores are one of the main reasons credit is available to so many people. One of the most widely used is the FICO score. In 2013 alone, lenders purchased more than 10 billion FICO scores.
“The impact of any credit event on a person’s FICO score is strongest when it initially happens,” Anthony Sprauve, senior consumer credit specialist at FICO, told USA Today. “Current behavior carries more weight than past behavior.”
The news isn’t all bad: Because negative information from your past will eventually be deleted, you can take steps to improve your credit by taking control of your debts and building a new history of on-time payments.