11 Mistakes To Avoid During Credit Repair

In today’s society, your credit score could have an effect on the quality of life you have. It is imperative for you to avoid certain mistakes during credit repair.

Without a good credit score you will pay more in interests rates for cars, may be denied a mortgage from the bank for that dream house, or even find it hard to get that loan for your business.

While improving your credit score is important, the process doesn’t have to be difficult.  Here are mistakes that are commonly made during credit repair.

Don’t Provide Additional Information

Providing additional information for the disputed item can be detrimental. 

Accurate information is required by the credit bureaus so you must be sure that all information you are providing adds up. 

For instance if your report is showing you owe $1,000  and you really owe $500, don’t report you owe $500.  You would just notify the bureaus that the item is not accurate.

Use Certified Mail

When you send certified mail they recipient must sign for the mail.  This way you know exactly when the creditor receives your mail. 

When the other party signs for it, the mail will have the date and time delivered.  This is crucial in order to keep a paper trail.  This is important if the item requires a claim to be filed.  So it’s in your favor to send it certified.

Keep a Copy of Your Correspondences

Make sure you always keep a copy of your correspondences. 

As mentioned above you want to keep a paper trail.  Also you want to keep a record for yourself to validate any information.  If there are any discrepancies, you have proof that the information is inaccurate. 

Avoid Electronic Disputes

Don’t use electronic options of disputing on credit bureau websites.  The old fashion method of sending letters works best.  You lose many of your rights when using electronic disputes. 

On those websites you are agreeing to specific terms that are in favor of the bureau.  They are not required to respond back to you in writing.  If you send a letter, they have to reply in writing and they have to respond within a specific time frame.

Keep Credit Card Accounts Open

Keep credit card accounts open.  I understand you want to get rid of the card especially if you had a large amount to repay.  Closing the accounts may reduce your score and could be detrimental to your credit repair.

One it will affect your debt ratio.  Two you want to keep the history with the credit card companies.  Instead use it maybe once a month and then pay in full when you receive your statement.

Pay Your Credit Cards off in Full Every Month

Paying your cards off monthly shows that you are able to manage your finances and that you are a low credit risk.

Request a Credit Limit Increase

Check with your credit card company and see if they can increase your limit.  Showing that you can manage a larger credited line will help your credit score.  Now if they have to run your credit first then don’t request an increase.  You want to avoid an additional inquiry.

Don’t Dispute using Internet Templates

You run the risk of it being denied by credit bureaus.  It looks frivolous, so you want to use templates as a model for your dispute only.  Put it in your own words so it won’t be denied.

Stay on Top of Your Credit

Check your credit score for free at least once a year.  As you check yearly, you can find discrepancies early and get it cleared up before it negatively effects your credit score.

Re-establish Your Credit

Find a bank or credit card company that will allow you to deposit money and use it as a line of credit.  Get them to write a statement showing that you are able to manage that account.  There are companies that extend a small amount of credit to those who’s credit is less than favorable. 

Reduce credit Inquiries

You have hard inquiries such as applying for loans or credit cards that will negatively affect your credit.  Hard inquiries can remain on your report for up to two years. 

Also hard inquires over a 12 month period are factored into your credit score.

From the book Credit Zilla by Dr. Uyi Abraham

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