Credit Repair is not difficult, but you can definitely weaken your efforts if you don't pay attention to some key things.
Here are common mistakes people make which you can easily avoid by following these steps:
Perhaps the biggest mistake of all is putting off credit repair altogether. For some reason, people just think that if they ignore the situation, it will improve or better yet go away altogether. Even though most negative information will fall off your credit report after a number of years, that's a long time to live with bad credit and if you don't do anything positive to repair your credit, you will be left in a situation where you have zero credit – which is worse than having bad credit.
Hiring a credit repair company. Credit repair companies don't have the best reputation. In fact, the Federal Trade Commission has been quoted as saying it's never seen a legitimate credit repair company. Credit repair companies often make lofty promises that they can't legally fulfill. In the end, you're better off saving your money and doing it yourself. It will take you the same amount of effort and the same amount of time.
Closing credit card accounts. A lot of people don't realize that closing a credit card can be bad for your credit score, especially if it's a credit card with a balance or one of your older credit cards. Think twice about canceling credit cards.
Going off the credit grid. A lot of people who go through a period of bad credit swear off credit cards. But, without them you could have difficulty getting new loans or other types of credit. Not only that, using a credit card the right way will help rebuild your credit as you go through the repair process.
Failing to dispute with the credit bureaus first. Always send your disputes through the credit bureau instead of the credit card, collection agency or mortgage companies. Always dispute your negatives with the credit bureaus before doing anything else. In the first credit bureau dispute, 10-20% of all items fall off. Get the easy stuff first.
Skipping one credit card payment to make another. Prioritizing payments is smart. Skipping some payments for others is not. If you want your credit to improve, you should not miss payments. Your credit will continue to get worse instead of better. The only exceptions are accounts that have already been charged off or have gone to collections. If you have to choose between paying a collection account or paying an account that's current, pick the account that's current.
Failing to document or keep a paper trail of communications with the credit bureaus. Why is documenting so important? The credit bureaus must respond to your request within a 30 day window or the item must come off. If you don't keep track of when the time is up, you are missing an important advantage. Keep track of when you send and receive letters. You should also make sure you send your disputes by certified mail so that you receive a return receipt as proof that your dispute was sent and received.
Not checking your credit report. Before you ever begin repairing your credit, you should check your credit report. Your credit report will help you figure out what items you need to focus on to improve your credit. Without a copy of your credit report, you'll have a hard time figuring out where to start repairing your credit.
Being unrealistic. If your credit report is in bad shape, there is no such thing as a quick fix. Repairing your credit takes time, expect between one and two years to see a marked improvement. Patience is required to see results.
Giving up. The process can be very overwhelming, especially if you are new to do-it-yourself credit repair. Take one step at a time. You don't have to do everything at once. Do things a few days or a week apart.
Here are common mistakes people make which you can easily avoid by following these steps:
Perhaps the biggest mistake of all is putting off credit repair altogether. For some reason, people just think that if they ignore the situation, it will improve or better yet go away altogether. Even though most negative information will fall off your credit report after a number of years, that's a long time to live with bad credit and if you don't do anything positive to repair your credit, you will be left in a situation where you have zero credit – which is worse than having bad credit.
Hiring a credit repair company. Credit repair companies don't have the best reputation. In fact, the Federal Trade Commission has been quoted as saying it's never seen a legitimate credit repair company. Credit repair companies often make lofty promises that they can't legally fulfill. In the end, you're better off saving your money and doing it yourself. It will take you the same amount of effort and the same amount of time.
Closing credit card accounts. A lot of people don't realize that closing a credit card can be bad for your credit score, especially if it's a credit card with a balance or one of your older credit cards. Think twice about canceling credit cards.
Going off the credit grid. A lot of people who go through a period of bad credit swear off credit cards. But, without them you could have difficulty getting new loans or other types of credit. Not only that, using a credit card the right way will help rebuild your credit as you go through the repair process.
Failing to dispute with the credit bureaus first. Always send your disputes through the credit bureau instead of the credit card, collection agency or mortgage companies. Always dispute your negatives with the credit bureaus before doing anything else. In the first credit bureau dispute, 10-20% of all items fall off. Get the easy stuff first.
Skipping one credit card payment to make another. Prioritizing payments is smart. Skipping some payments for others is not. If you want your credit to improve, you should not miss payments. Your credit will continue to get worse instead of better. The only exceptions are accounts that have already been charged off or have gone to collections. If you have to choose between paying a collection account or paying an account that's current, pick the account that's current.
Failing to document or keep a paper trail of communications with the credit bureaus. Why is documenting so important? The credit bureaus must respond to your request within a 30 day window or the item must come off. If you don't keep track of when the time is up, you are missing an important advantage. Keep track of when you send and receive letters. You should also make sure you send your disputes by certified mail so that you receive a return receipt as proof that your dispute was sent and received.
Not checking your credit report. Before you ever begin repairing your credit, you should check your credit report. Your credit report will help you figure out what items you need to focus on to improve your credit. Without a copy of your credit report, you'll have a hard time figuring out where to start repairing your credit.
Being unrealistic. If your credit report is in bad shape, there is no such thing as a quick fix. Repairing your credit takes time, expect between one and two years to see a marked improvement. Patience is required to see results.
Giving up. The process can be very overwhelming, especially if you are new to do-it-yourself credit repair. Take one step at a time. You don't have to do everything at once. Do things a few days or a week apart.
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