Financial recovery and credit score improving process after debt settlement are quite similar to recovering from other financial glitches like foreclosure, car repossession, bankruptcy, etc. It is to be noted that improving score will demand little money, but a considerable amount time, efforts and patience.
The following will help:
- Order for your free credit score. However, if you do not qualify for the same, then place a request for a paid copy so that you can do some severe disputing. Look for all the creditors whom you still haven’t paid (30 days late payment). Ensure that you send them an apology letter or e-mail asking for forgiveness and explaining them the reason behind this delay.
- Establish a line that explains all your credit score transactions. Begin with secured credit cards which report all the delay in payment to the credit bureaus. It is to be noted that secured credit cards are funded completely with your money. This will help reduce financial risk on lenders or creditors. However, ensure that you do not open more than 2 new lines of credit.
- Once you have established lines of credit, play smart and ensure you do not keep huge spending on new accounts because new accounts are given major weight when the scores are calculated. The balance should range between 10-30% of your balance.
- Once the credit that is not taken care by the debt management company or all the new credits run positive, you will be able to build your score gradually. However, you need to ensure that you pay your creditors on time preferably before the due date.
- After getting back on track, ensure that you do a periodic check of your credit report at least twice a year so that any problem in the report can be disputed on time.
With these little tips, you will certainly be able to get back on track and maintain a healthy report.