Paying off your collections is one way to improve your score
Do you ever worry that having collections on your credit report will hurt your chances of getting approved for a loan or other financial services? You’re not alone! Unfortunately, one in seven Americans has fallen victim to this type of debt. Collection items can hold down your overall credit score and it might seem impossible to get back in the good graces of creditors if you’ve been hit with these types of charges. But there is an answer: paying off collection debts is one way to improve your overall score and start rebuilding credibility with lenders. In this blog post, we’ll look at why collections are problematic and how you can use them as a springboard toward better long-term credit health. Understand how your credit score is calculated Understanding credit scores and how they are calculated is key to maintaining credit health. Your credit score is a numerical representation of creditworthiness , ranging from 300-850. Lenders use this 3-digit number to determine credit risk