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Home>How this woman raised her credit score from 490 to 800

How this woman raised her credit score from 490 to 800

How this woman raised her credit score from 490 to 800

10/04/2017

By Maria LaMagna

Her score was low because of late debt payments

When Janet Alvarez graduated from business school in 2011, she had a load of debt and few job prospects. Some $100,000 was student debt and $30,000 was medical debt, which she ran up while she was in school and had limited savings and income.

"I thought I had done the right thing by furthering my education," Alvarez said. "But I found myself graduating into the Great Recession."

She attended Northwestern University for her undergraduate degree and Arizona State for her MBA.

She didn't have health insurance and struggled to pay her medical bills. As a result, when she graduated her credit score was a paltry 490, which is considered the lowest tier, "poor credit," according to the Fair Isaac Corporation (FICO) scoring system.

People with lower credit scores often end up paying more in interest over time (http://www.marketwatch.com/story/this-is-one-reason-why-the-rich-will-get-richer-2017-05-16), since it's harder for them to be approved for loans with low interest rates.

Alvarez decided to get serious about her debt and the impact on her score. Just six months after she graduated from business school, her score was in the 600s: Still below average, but considered "fair" credit. In 2014 it was above 700 and by late 2015, her score reached 800, an "exceptional" score that is well above average.

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