Rookie Credit Mistakes and You
Are you making rookie credit mistakes?
It’s easy to make mistakes when it comes to credit repair — especially if you’re a rookie. Whether you’re paying off credit card debt, hoping to increase your credit score or need to remove negative items from your credit report, there are a few Dos and Don’ts. Before you decide to dive right in on your own, read our list of rookie credit mistakes you could be making.
Summary:
- Agree only to written terms
- Leave credit card accounts open
- Avoid opening new credit cards
- Quickly remove negative entries
- Pay debt quickly
- Avoid new debt
- Consider seeking help
-
Only Agree to Written Terms
If a creditor calls you, keep the conversation brief. Ask for a hard copy of their request and get off the phone. Debt collectors are trained in the art of human emotions and will use science-based psychology to get whatever it is they need from you. Always stay one step ahead and firmly request all of their inquiries by mail. If you have a P.O. Box, it’s best to give them that address.
BetterCredit recommends requesting delivery confirmation so both parties can track the correspondence.
-
Leave credit card accounts open
This is a common newbie move. It makes sense initially to close accounts with delinquent entries in an attempt to improve your score. This maneuver negatively impacts your credit report and your overall credit score. The reason is that credit scores are based on both the longevity and numeric balance that card has.
The longer the card is open, the better the score will be with regular payments. A wiser way to handle this is to have the issuer remove the missed payment or contact a credit repair company such has BetterCredit to have them work on your behalf to cleanup your credit history.
-
Avoid opening new credit cards
If your credit score is poor, the chances of opening a new card are unlikely. In the off chance that a lender provides you with additional funds, your rates will be very unfavorable. This means that a loan of $20,000 may end up being $40,000 (or more).
Each new card you attempt to open signals an “inquiry” to the credit bureau. This means that your score automatically drops a few points every time you want a new card. The more inquiries you have the longer it could take to repair your credit.
If you have an issue getting a traditional credit card some suggest contacting a secured credit card company, which may help you rebuild your credit.
-
Quickly remove negative entries
In addition to building good credit history with a secured credit card, delinquencies can also be removed from your credit report. The faster you’re able to delete these entries, the sooner you’re credit score will increase. Here is a list of items BetterCredit can help you remove from a damaged credit report:
-
Pay debt quickly
The main trick to paying off debt and boosting your credit score – start with the cards that have reached their credit limit or have nearly reached their limit. From there, reduce the debt on auto loans and other items where you are paying installments. This will dramatically improve your credit score. If applicable, remove any student loans from your report.
-
Avoid new debt
After paying off debt, it can be tempting you use your credit cards. This cycle of owing credit card companies can be very dangerous and addictive.
Ensure that your credit is properly managed. Your finances are extremely important and require regular maintenance.
-
Consider seeking help
If you continue to feel overwhelmed, seek help. That could mean you contact a credit repair company who can work on fixing your credit score for you. Or it could mean contacting each creditor directly and submitting disputes with each issuer. Whichever method you choose, BetterCredit is here to support you.
Any newbie can avoid the above rookie credit mistakes by focusing on taking the right steps to improve one’s credit score. Keep in mind that this is a process. Credit scores are improved over time and with consistent effort.
Contact us today at 800-800-4124 and speak with one of our BetterCredit experts.
