Understanding Credit
Section 4 - How to improve your credit score
As stated above, there are valid reasons that a consumer may have a poor credit score. When this happens,
it is extremely important for the consumer to begin improving their score as soon as their financial situation
improves. The most logical method for improving a consumer's score is to bring past due accounts current and
then keep them current. Obviously, it may not be possible to bring all accounts current at once so it is best
to pick one account, bring it current and keep it current. Then pick another account and do the same thing. If
there is ever a question as to which account will have the biggest impact on your score, have your lender run a
report called Credit Expert and it will tell you in order of impact the best way to proceed. It is important to
understand that just because the life event has been corrected and you are earning money again, there needs to be
a track record of trying to repair your credit. It most instances, the credit score did not get lowered due to
one isolated event and became lower over time. Therefore, it will take time to repair the problems and get the
credit score raised. When the credit score needs to be repaired the consumer needs to be patient as it takes
time to make the corrections. In situations like this, the consumer should resign themselves to waiting to buy
a new home until they fix the problems of the past. Once there are payment plans in place a track record of
making these payments, it is easier for a lender to find a way to grant new credit as the willingness to pay has
been demonstrated.
Section 5 - Payment Shock
Jump to a section
