There are a lot of powerful techniques you can use to clean up your reports and boost your scores. But to get the best results you also better know what not to do. Here are five credit repair blunders to look out for!
Ignoring the Issue
Don’t ignore your credit. This is the biggest credit repair error possible. It is essential to pay attention. The credit reporting industry is a giant machine with millions of moving parts, all of which are subject to error. It is uncomfortable to start a credit repair project, but it is best done sooner rather than later. Think of credit repair as a swim in a cold pool; it’s hard to get in, but once you get used to the water, it’s quite invigorating.
Failing to Rebuild
The next biggest credit repair mistake is the failure to rebuild credit. Tough times may have left you without any open accounts. You may think that you should wait until your credit is better before applying for new credit, but you would be wrong. Get online and open two new secured credit cards today. Credit cards take several months before they start to produce a positive benefit so you really need to start today.
Maxing Out Your Balances
You can pay your credit cards right on time month after month and watch while your credit scores plummet. How could that be? The FICO scoring model now puts so much weight on the relationship between your balance and your credit limit that a single maxed out card can cost you up to 150 points on your score; a veritable credit repair catastrophe. If you want credit repair success, get those balances down.
Store Card Calamity
Stay away from store cards, at least while you are in credit repair mode. The FICO scoring model has a bias against store cards. Attempting to build credit with this type of debt will do you more harm than good. Stick with MasterCard and Visa, and as mentioned above, keep your balances down.
Hiding From Your Student Loans
If you have a student loan in default pick up the phone and call your lender today. As hard as it may be to face this reality it is much better done now than later. Student loans have no statute of limitation for collectability, and every day that goes by carries additional costs. You may think they have forgotten you, but they haven’t. In fact Sallie Mae has become the world’s largest collection agency. But there is good news too. You have lots of legal rights. If you are in our credit repair program call us for help.