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How Fast Can You Rebuild Your Credit?The majority of consumers still have FICO credit scores higher than 700, however, within that group, the share of those borrowers in the top two tiers of scores has been shrinking over roughly the past year.

“Based on a fresh look at the national distribution of FICO® 8 Scores, it appears that the profile of credit risk for U.S. consumers, while still mixed, may be slowly returning to a prerecession pattern,” according to a new report released by the the credit scoring agency FICO. FICO 8 is the company’s newest scoring model, and it is one of many FICO scoring models – though many lenders continue to use older FICO scoring models.

Through October 2012, 53.4 percent of consumers nationwide have credit scores of 700 or better, which is obviously a preponderance of the credit-using population, and that’s up slightly from the 53.2 percent who fell into the same category a year earlier, according to the new FICO data. However, there was also a slight decline in the number of people whose scores were between 750 and the top level of 850.

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In all, those with ratings between 750 and 799 slipped to just 18.8 percent of all borrowers, down from 19.6 percent at the same time the year before, the report said. On the one hand, some of those borrowers seem to have migrated into the 800 to 850 range, as that proportion increased to 18.4 percent of all consumers from 18.1 percent 12 months prior. But some moved down as well, as those in the 700 to 749 range increased more dramatically, to 16.2 percent from 15.5 percent, and there was also a slight uptick in the 600 to 649 category, which rose one basis point to 12.2 percent.

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However, many of those with lower credit scores were able to successfully boost their scores, the report said. For example, more than three in 10 people who had scores from 550 to 599 were able to raise their scores above 600 over the course of the year. Perhaps more importantly, that more than the just over a quarter of borrowers in the same starting category who saw their scores dip below 549.

Overall, the number of consumers whose ratings still hover below 600 is still higher than it was at the same time the year before, as well as in 2005, the report said. This condition is likely the result of lingering financial problems still being felt by many even years after the official end of the recession.

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Consumers looking to improve their credit scores may want to try to improve their payment habits so that more bills are being paid on time, with larger contributions made every month. This will also help them to more quickly slash their balances and make their monthly payments more valuable in reducing debt in the future.

If you’d like an easy-to-understand overview of your credit file, including your scores, and how you compare to others in your state and the country, check out Credit.com’s free Credit Report Card.

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