What is the single biggest credit mistake that I should avoid?
Late payments are definitely a contender for the most damaging credit repair error, and they can send your score down a quick hundred points or more in the first month or two they appear on your credit report. But there are many credit repair mistakes that can hurt your progress, and many that can keep your scores from improving even if you make all of your payments on time. Here is a quick overview of some of the most common credit repair mistakes that people make:
- Late Payments: Don’t let yourself fall behind on your payments. Your score will rebound significantly from a late payment after a few months, but you should take steps to avoid this credit repair error.
- Failure to Rebuild: If tough times have left you with no open accounts rebuilding your credit must become a priority. Credit repair cannot succeed without open accounts in good standing.
- Cancelling Your Cards: Simplicity is a wonderful thing! And I truly understand why some people opt to close their credit cards as they are starting a credit repair program, but unfortunately you cannot build your scores without open accounts.
- Maxing Out Revolving Accounts: Your credit card balances can have a dramatic effect on your scores. You must keep your account balances low relative to their limits. For credit repair purposes it is best to utilize only twenty percent of the card limit.
- Ignoring Collection Letters: If you get a collection letter don’t throw it away. It is your right to validate a debt within 30 days of getting a collection letter. Don’t miss this credit repair opportunity.
- Believing Your Eyes: The credit reporting system is complex and reporting errors are common. For credit repair success give yourself the benefit of the doubt. If you are not sure about the accuracy of an item you should challenge it.