Smart consumers can work to rejuvenate flagging credit scores

Many U.S. consumers are struggling to stay solvent in the wake of a damaging economic recession. However, careful and intelligently planned financial activity can breathe new life into a wounded credit score, according to MarketWatch columnist Jennifer Waters.

Waters offers behind-the-scenes insight into the sometimes murky ways in which banks and reporting agencies calculate credit scores: “Many banks rely on a proprietary statistic known as the odds-to-score ratio that has more to do with people like you than you alone. It tells lenders what the likelihood is of a 90-day delinquency based on what your score is.”

In addition to the odds-to-score ratio, Waters warns that consumers with sterling credit histories will take bigger credit score hits from missed payments than those who have already experienced several bumps in the financial road. This, she says, is because a consumer who has never missed a payment before is exhibiting out-of-character behavior by doing so.

For some, professional assistance with debt management may be necessary, although they must also take care to select the most professional firm.