Five Common Mistakes to Avoid When Improving Credit Score
Many people find themselves in a situation where they must deal with a bad credit score. In some cases, this may be a contributing factor to them filing for bankruptcy. For many people, the first step is to think about your repairing your credit. During this process, there are a handful of pitfalls you should be aware of that you will want to avoid.
In order to ensure you make the best choices and are on the path to restoring your credit, it is important that you are aware of the most common mistakes made regarding credit repair. Here is a look what we believe are some of the biggest mistakes people make when trying to reach financial stability and rebuild their credit score:
- Failing to Take Action and Repair Your Credit
The biggest mistake people make when dealing with a bad credit score and needing to repair it is failing to start the process. Unfortunately, you cannot expect your credit to repair itself. While it is true that most negative information will eventually fall off your credit report after seven years, there are things you can do in the meantime to get improve your credit score.
- Closing All of Your Credit Cards
Many people mistakenly think that by closing all their credit card accounts, it will automatically improve their credit score. However, you can actually use your positive credit card accounts to help rebuild your credit during the repair process.
3. Avoiding Your Credit Report
Another of the most common mistakes people make when trying to restore their credit is not checking their credit report. There are three main credit reporting companies: Equifax, TransUnion, and Experian. In order to figure out which items you should focus on first to improve your credit, it is important to request a copy of your report from each of these companies. Once you receive your report, make sure you go over it thoroughly and compare all three against one another.
4. Disputing Everything
While you should most definitely dispute items on your credit report that are incorrect, disputing everything negative will actually hurt you even more. For one thing, this tactic is not believable, and if you dispute too many items, the credit bureaus may actually dismiss all of your disputes. In addition, you actually do not want everything removed from your credit report. Positive accounts should be left alone, as they will actually help your credit score in the long run.
5. Too Many Balance Transfers
Balance transfers are tricky. While they can be a useful option that allows you to move balances around in order to make them more manageable, using balance transfers to avoid making late payments will only help you for so long. In most cases, there are fees associated with each balance transfer. These fees will eventually add up, causing even more debt for you.
If you find yourself in a position where your credit score has been ruined and you are ready to work on rebuilding us, please contact a bankruptcy lawyer. Attorneys will work with you one-on-one to determine what the best plan of action is for you in order to reach financial stability.