Most people do all they can when it comes to credit repair. They pay their bills and try to keep their credit cards from making the wrong charges, but for some reason, their reports and scores never quite seem to work out as well as they hope.
To help you make some sense out of what may going wrong with your attempts at restoring your credit, the leader in San Diego credit repair services has put together a list of 5 of the top mistakes just about everybody makes in their efforts to repair their bad credit. Check these off as what not to do when getting your finances back on track:
Closing credit cards. Despite your initial instinct when faced with a poor credit history, closing your credit accounts is actually not the best idea for credit repair. Doing so will switch them to inactive, which means they’re now essentially dead weight and will eventually fall off your report, leaving you with a smaller credit history. Having a shorter history can make you look less financially responsible than you are; it’s like you erased that hard work for nothing.
Late or missed payments. The first step to total credit repair is making sure your accounts are current and up-to-date, and that you haven’t been missing too many payments on your accounts. If you need help with this, set up a budget for yourself to help you manage your money situation better.
Credit accounts are maxed-out. If you use your credit cards to pay for just about everything in life, you’re probably teetering the edge of maxed-out accounts (assuming you haven’t fallen off already…). If this sounds familiar, consider closing any excess accounts you have and rarely use, and start paying your existing accounts down to around 30% of the available balance.
Too much shopping for new credit. If you routinely shop around for new lines of credit – that is, if you fill out every credit card application that gets shoved in your face – you may be doing much more harm to your credit than you realize. Each credit application counts as a “hard inquiry” on your report, and unless your credit repair plan calls for 25 new credit cards (hint: it shouldn’t), stop filling these out every time you see one.
Thinking you only have one credit score to worry about. Most people think of their credit score as one number, but it’s actually three separate scores. When attempting to fix your credit, the scores you should watch closely are your FICO scores, the model used by most lenders to determine your credit risk. Work on getting that as high as it’ll go, and you’re one step closer to financial freedom.
