The 10 Biggest Credit Repair Mistakes to Avoid
There are millions of people in the U.S. who currently suffer from bad credit. The good news is that bad credit is not permanent and can be fixed. However, you need to be careful how you go about it because there are some common credit repair mistakes that you can make.
- Avoid These Credit Mistakes – Do not dispute open accounts. When you dispute an account with a collector, they often close the account temporarily until all of the debts in the account can be verified. When the account is closed, it reduces your credit history which can also lower your overall credit score.
- Keep accounts open. Closing credit card accounts actually lowers your credit score. Creditors like to see that you can keep up with monthly payments.
- Biggest Credit Mistakes You Can Make – Keep notes on all your efforts. Many people do not keep records of who they spoke to and when they spoke to them when dealing with creditors. If you want to dispute any items on an account, documentation is an important key.
- Common Credit Repair Mistakes – Do not concentrate on one card at a time. If you have multiple cards, you need to make payments on all of them. Never let the payments go on one card while you pay off another card because being late will lower your credit score.
- Mistakes That Could Destroy Your Credit Rating – Avoid consolidating credit cards. Many people make the mistake of consolidating several cards into one with just one monthly payment. It is better to make the payments on several smaller cards than just one larger card.
- Credit Repair Mistakes – Do not hire a credit repair company. Many credit repair companies are only interested in taking your money and not delivering on their services. Instead of paying additional money for a credit repair company, save that money and put it to use on your monthly payments.
- Mistakes to Avoid with Debt Collectors – Not using your right to make sure the debt is yours. Just because somebody calls you on the phone and says you owe them money doesn’t mean you should trust them. You have 30 days to validate the debt so make a request in writing for the account records on the debt.
- Ten Common Credit Mistakes – Using too much of your available credit. The less credit you have available on a card, the lower your credit score will be. If you only use less than 40% of your available credit limit, your credit score will increase.
- Too many old addresses. If you have moved several times over the recent years, these addresses will likely still be on your credit report. By having them removed, you can increase your credit score because it makes it look like you have more financial stability.
- Credit Repair and Mistakes – Avoid bankruptcy as a means to repair credit. Bankruptcy will only lower your credit score even more and stays on your record for anywhere from seven to ten years. Filing bankruptcy also will hinder your chances of getting a loan in the future.
This entry was posted on Thursday, August 27th, 2009 at 3:38 pm and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.