According to Fair Isaac Corp., the number of people with excellent credit has decreased since the recession. In April 2008, 18.7% of the population had FICO scores of 800 and above, while in April 2010, only 17.9% had that distinction. Another 19.5% of Americans had FICO scores between 750 and 799 in April 2010. The median FICO score has been about 711 since April 2010, says Paperno. During that same period, those with low credit scores increased, with 35% of Americans having FICO scores below 650, up from 33.7% of Americans in 2008.
Itâ€™s easier to achieve excellent credit if you diligently manage your credit and donâ€™t fall into any debt traps along the way. For those with a spotty track record, it typically takes between three and seven years to rebuild your score unless itâ€™s a personal bankruptcy, which will take 10 years to fall off your credit report, Ulzheimer says.
For example, if a consumerâ€™s credit score dropped to the 500s, it might take a couple of years to get the score to the 600s or lower 700s. However, it might take seven to 10 years for that same person to get up to 780 because enough time would have to pass for any negative information to fall off the credit report. â€śA 780 is an elite credit score, and if you want an elite credit score, youâ€™ve got to have an elite credit reportâ€”which means you canâ€™t have anything negative on it,â€ť Ulzheimer adds.
The first step you should take is to scrutinize your credit report. â€śWhen you get a copy of your report and score, the report will tell you the main reasons your scoreâ€™s not higher,â€ť says Tom Quinn, credit score expert for Credit.com. You can request a free copy at Annualcreditreport.com. If the biggest factor is high credit card balances, start paying those down aggressively.
Likewise, if late payment is the culprit, your score will gradually rise as the late payment ages, provided you donâ€™t continue to make more late payments and you keep low levels of credit indebtedness.
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