Today, people can monitor their credit scores by subscribing to services that provide them with periodic credit reports. People often have a fear of never fixing their credit scores after bankruptcy or other financial troubles, but credit scores can be restored. You can rebuild credit and restore a credit score to a former acceptable range, but it may take some work.
It is a good idea to be aware of what actions damage your credit score, so you can avoid them.
FICO or the Fair Isaac Corporation was the first company to devise and introduce a credit reporting system and theirs is the most widely used credit reporting system today. Under the FICO system, credit scores can range from 300 to 850. How FICO determines its scores is a trade secret, but there are certain financial activities that dramatically reduce credit scores.
Bankruptcy. Credit scores drop up to 240 points.
Foreclosure. Credit scores drop up to 160 points.
Maxing out a credit card. Credit scores drop up to 10 points.
Late payments. A 30-day late payment by consumers with a good credit rating may see the score drop 60 to 80 points. A 30-day late payment by consumers with an excellent credit rating may see scores drop 90 to 100 points.
FICO also provides a lot of other valuable information about how to improve your credit score, which is worth looking into when coming out of bankruptcy.
Harold Shepley & Associates is a Pennsylvania debt relief law firm. Get help with your financial problems through bankruptcy or bankruptcy alternatives. Call 1-866-284-7062 or visit us at www.shepleylaw.com.