Rebuilding Your Credit After Debt Settlement

Posted by Century Support Services on Jun 07, 2021

Sometimes paying off the full balances of your debt simply isn’t possible. Settling your debt paying less than originally agreed, is better than leaving it unpaid, but it can still negatively affect your credit score.

When your debt settlement journey toward better financial health is complete, how can you work on rebuilding your credit?

Try these tips to bring your credit score up.

Set a Budget and Stick to It

A personal budget can help you from getting into debt again after a debt settlement. Include all of your monthly expenses so that you can better understand where your money goes and how you spend it. This will help you manage your money better so as you get new credit responsibilities you will have a plan in place to make your payments on time.

Regularly Monitor Your Credit Report to Stay Ahead of Problems and Errors

Checking your credit report on a regular basis allows you to make sure that paid or settled debt has been removed. It also allows you to identify and items on your report that are not valid or not yours. Yes, sometimes items on your credit report are inaccurate and some may not even belong to you, so it is in your best interest to check your report regularly. That way you can address any discrepancies quickly.

Become an Authorized User and Benefit from Someone Else’s Good Credit History

Do you know someone who has great credit and solid credit history? If so, see if they would add you to one of their established accounts as an authorized user. That can raise your score quickly but be aware that just as their credit activity affects your score, your credit activity affects theirs.

Begin to Rebuild Your Credit by Applying for New Credit

If you settle your debt and realize that you have no open accounts or very few accounts, you will need to get some credit. Gas cards and store cards are typically easier to get than traditional credit cards, but a secured credit card can get you started in the right direction. Just do what you can to begin rebuilding your credit.

Pay Your Bills in Full and On Time

Did you know that how you pay your bills makes up about 35% of everything that is used to determine your credit score? It’s true. When you pay your bills at least on time it counts as positive activity. When you pay in full each month, that will not only help prevent you from slipping back into credit card debt, it will also help keep you out of debt.

Keep Your Credit Utilization Ratio in Mind

Your credit utilization ratio is a comparison of the total of all the credit that you have available to you and the amount of credit that you are using. Many experts say that keeping it under 30% is important. The lower this number is, the higher your credit score will be.

Get a Small Personal Loan

Your credit score benefits from mixed types of credit. This means that having a credit card and either a mortgage or car loan, it will raise your score higher as long as you make your payments on time. Even a small loan can help.

Debt settlement is serious business. However, if you are looking at it as a way to avoid bankruptcy, it can help tremendously. Once you have settled all of your debts, you should resolve to always pay your debts, pay on time, and pay in full. That is the best way to stay out of financial trouble after you settle your debt.


Contact Century to Learn About Debt Settlement

If debt settlement sounds like it might be the right debt reduction strategy for you, contact Century Support Services. Century has helped hundreds of thousands of people settle debts that they otherwise couldn’t pay, and has saved clients a lot of time, aggravation and money in the process. To date, Century has settled more than $1.3 billion in debt and maintains a 94% satisfaction rating.

To get started, you’ll receive our free assessment and our Certified Debt Specialists will create a personalized program plan for you.

To learn more about the debt settlement process or if you have any general questions relating to how long does debt settlement take or how long will it take to recover from debt settlement, we’re happy to answer any questions.
Contact us today!