How To Improve a Credit Score After a Missed Payment
Payment history is an essential factor in a credit score. A missed payment, on the other hand, will harm a credit score right away, Experian says, and tells lenders that a customer may be having financial difficulty and is a sign of credit risk.
Experian shared four things to understand when a credit score recovers from a missed payment.
- Bring your account to current: If a collection is present in a report, paying off that collection could improve a credit score right away. The same goes for past dues and outstanding balances: bring those accounts current as well.
- Utilization rate: The utilization rate measures the balances on revolving accounts concerning credit limits. By paying down credit card balances, the better for credit scores to recover.
- List of risk factors: The factors contained in this list are specific to a consumer’s unique credit history, and give insight into what changes they can make to improve their score.
- Most recent credit history: Late payments stay on a credit report for seven years. However, the most recent credit history is weighed heavily. If all other payments are made on time going forward, past delinquency will impact a credit score less and less over time.
For more information about credit repair, visit www.scoreceo.com/blog.
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