Will I Have A High Credit Score If I Pay All My Debts Off?

Your credit score is a reflection of how responsible you are with debt, and when you pay off your debts, you demonstrate that you can handle financial responsibly. Your credit score is determined by the financial decisions you make on a daily basis. When you pay your loan or credit card obligations on time, for example, you establish a good payment history that improves your credit score. On the other hand, making late payments or having large credit card debts can have an impact on your credit rating.

Not necessarily. If you’ve been late paying your bills in the past, this data may stay on your credit report for up to five years and for a major crime violation, it will remain on there for seven years. Even if you’ve paid off all of your outstanding debts, your credit Score will likely drop due to prior late payments or defaults. However, you can raise your credit score by always making timely loan payments and paying invoices on time.

If you have a credit report default, there are steps you can take to improve your credit profile. Repaying on time each month, such as a personal loan or mortgage payments, or the minimum balance on your credit card, will help boost your score.

If you want to see how your credit score will look when all of these elements are factored in, check your credit score now. That is helpful, but monitoring your credit is even more useful because it allows you to get an ongoing perspective on how your financial habits influence your credit rating.

When you understand how your credit score works and put in the time to improve it, seeing your score rise over time will make you feel better about your finances.

If you are struggling with a bad credit score, don’t despair. There is help available and Clear Credit Solutions can guide you through the process of fixing your credit rating. Contact us today for a free credit file assessment and we will get started on repairing your credit history. With our help, you will be able to improve your financial future and access the products and services that you need.