Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full.

It’s important to note that repairing bad credit takes time and there is no quick way to fix a credit score. In fact, out of all of the ways to improve a credit score, quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast.

So you have some extra money in your pocket and you’ve decided to pay off one of your credit card collections early. You know that credit scores are extremely important so your goal is to pay off the collection that will yield the most credit score improvement — the “FICO ROI” (return on investment).

Get a credit card with a high limit, keep the balance low and use the credit card to establish a credit history or boost a low credit score. Remember — the more available credit on a credit card, the better.

Good credit takes patience and persistence and if you pay your bills on time and keep your credit card balances low over the long haul, you’ll be rewarded with a solid score.