Repairing a Bad Credit Score is Getting Easier

To repair your credit score in the past, you had to do a lot of guesswork. But because of the recent financial reform bill, lenders who refuse to loan you money will have to tell you why. They will also have to give you a copy of the credit score they used to decide to turn you down. This goes for employers, insurance providers, and anyone else who takes an “adverse action” against you based on your credit report.

Getting rejected sucks, but at least in the future you will know why, which means you can work to fix the problem.

For example, if you were rejected because you have too much credit available to you, you could reduce the credit limits on your credit cards.

In addition to doing the basics—making payments on time and keeping your debt at a reasonable level—you can also repair the damage from a bankruptcy or missed payments. Your FICO score places greater weight on recent activity. So if you missed payments a year or two ago, but have been paying regularly since then, you are probably in good shape.

A good credit score means a FICO score of 700 or greater. Anything less, and John Ulzheimer of says, “you’re in the frying pan, but you’re not in the fire.” Yet.