Common Credit Repair Mistakes

Many people feel hesitant after declaring, “I want to fix my credit.” It’s easy to wish for a better credit score, but common mistakes on the path to fixing credit can actually lead to a more lengthy process. Read on to discover some common scenarios.

1. “I’ll wait to rebuild my score.” While it seems logical to wait until your credit issues are resolved before taking additional steps to improve your score, you are missing out on a great way to fix credit. Be proactive about paying down your debt and looking for new ways to diversify your credit portfolio.

2. Closing old accounts will help fix my credit score.” Credit longevity is a good thing, and accounts that have been in good standing for several years can only help you. By closing your oldest account, your credit history will appear shorter than it actually is.

3. “I want to fix my credit; I should charge more on my credit cards.” Spending more does not equal better credit. In fact, maxing out your credit cards will hurt your score. The best way to use consumer credit to your advantage is to keep your credit card balances below their limits; ideally, aim for 25 percent or less.

4. “I don’t have time to deal with the long process of credit repair. I’ll bet there is a quicker option online!” Indeed there is, but be cautious. While there are reputable online companies aimed at fixing credit, do your homework before signing up. What are their credentials? How much experience do they have? Are there hidden costs? Find the answers to these questions to make sure you have an advocate, not an adversary.

5. “Keeping track of every credit-related email and letter is not that important.” Wrong. Keeping current records of the correspondence between yourself and the credit reporting companies is crucial. By law, these companies have 30 days to respond to disputes, but don’t rely on them to stay within this timetable. Have your dispute letters notarized at the post office to provide proof of the mailing date. You may need this documentation if you don’t receive a response.

The smart way to fix credit is the organized way. Before taking any steps to repair your credit, do your research. Find out which actions can help you (and hurt you) the most. Keep thorough records of your conversations and correspondence with the credit repair companies. “I want to fix my credit” is an assertive statement; let your actions follow suit.