You’ve done everything right. Lived on rice and bean sprouts (beans were too expensive). The last movie you saw starred a prepubescent Daniel Radcliffe; and you’re still waiting for this page to load because you switched back to dial-up a year ago. You’ve scrimped and suffered, and it’s paying off! At least, it’s paying off your credit card debt. You only have a few left to worry about.
So why, after all your hard work, hasn’t your credit score budged an inch?
Repayment isn’t the Only Thing That Matters
The idea that merely paying off credit card debt is the key to credit repair is a pervasive, ugly myth that has left thousands of people confused and feeling more hopeless than when they started repairing their credit. Just because you have a $0 balance doesn’t mean the account will be removed from your credit report. It seems obvious that just paying off the balance should fix the problem. Actively getting your credit card debt down is something you can personally control, so there is a lot of appeal built into this myth that keeps it alive.
The fact is, the term “credit score” is a little misleading. What you’re trying to change—and what banks are looking at—is your credit risk score, and a credit risk score doesn’t change based on the amount of credit card debt you’ve paid off. It changes based on whether you’ve ever had any debt at all. Thirty percent of a credit score is based on the amount owed to a creditor and that amount is weighed against the line of credit.
Your credit score is meant to predict the chance of financial delinquency, and if you’ve had a lot of payments more than 90 days overdue, or worse, sent all the way into collections, you’ve been pretty delinquent. By paying off the credit debt owed, and then maintaining a revolving debt balance under 50% of your allowed limit your credit score will be much healthier. But remember, just because you pay the balance to $0 the delinquency won’t just be removed from the report.
You’re in for a long haul
So how does one go about credit repair? Patience and persistence, is key. After seven years, creditors will age off your credit report, eventually leaving you in the clear. It’s not quite as simple as that, however. Any kind of contact with a creditor during those seven years could lead to them sneakily resetting the clock, and you might never kick clear. But, by starting today your credit future can be much brighter.
But there’s a faster way
The best option for improving your credit score quickly is to hire a professional credit repair services like Ovation Credit. Calling a case analyst at Ovation Credit is the right step to take control of your credit situation. They can help you l devise an optimal credit repair strategy, which can include disputing amounts with creditors—doing double duty both reducing your debt and repairing your credit—to getting creditors aged off your report early, so you can take some real steps toward your best possible credit score.