After turning to debt settlement, using credit cards can help rebuild a score

By Oscar Monfort on May 10th, 2010

Debt settlement may be used by consumers when faced with bills that are far beyond their means, although it will take time to fix their credit score.

For example, in a recent posting on her website, personal finance expert Liz Pulliam Weston received a letter from a reader who had pursued debt settlement for almost all of what they owed. Now the inquiring writer wanted to know how to build up a credit score, and was advised to use credit cards for small transactions and to pay off balances in full.

Pulliam Weston said this was a good piece of advice, adding that the reader should use less than 30 percent of their available credit. Experts note that using more than that amount of credit can have an negative impact on a credit score, as can being late on payments or maxing out a card.

Along with using cards to improve a score, Pulliam Weston said the reader should take a look at their finances and how they handle their money.

"Your poor scores suggest you got in over your head with credit in the recent past," Pulliam Weston wrote. "You'll have to be on guard that you don't do it again."

More Debt Settlement News

08-02-2010

If counseling and bankruptcy won't fit, debt settlement may be an option

07-30-2010

U.S. Courts offer bankruptcy comparison map

07-27-2010

Debt settlement with lump sum may help with overdue bills

07-26-2010

Debt settlement may act as alternative to bankruptcy, although other options also exist

06-29-2010

IRS may come calling after debt settlement

06-28-2010

Debt settlement may present its own financial challenges

06-26-2010

Debt settlement companies face new rules in Indiana

06-21-2010

Debt settlement may provide a better alternative to bankruptcy

06-09-2010

Debt settlement association urges Quinn to veto bill

06-06-2010

Bankruptcies see varied results, while consumers may consider other options

Related Resources