Easy Credit Mistakes We All Make

Even if you are trying to clean up your credit score, there are several mistakes that you can easily make. Don’t get trapped by bad advice, because you could end up hurting your credit score more than helping it. Even if something seems like a logical decision, you should be sure to research the ramifications before putting your decisions into play.

The number one mistake the people make when trying to improve credit score is to close their credit card accounts. A large part of your credit score is your debt to credit availability ratio. It is a good idea to pay off your credit cards, but you should leave the revolving account open. This means that you will have more credit available to you, which will offset the amount of debt that you owe. By closing those accounts, you rid yourself of the available credit, which makes the debt you owe appear even larger. In fact, the wisest thing to do is to use the credit card once a month for a small purchase, and then pay it off immediately when the bill arrives. By doing this, you will keep the credit card account open and active, which will prevent the credit card company from closing the account for you.

The second most common mistake that people make is a missed payment. This is, of course, a common sense thing. However, you may believe that missing a payment here and there will not affect your credit score, and you might be right. The score may not drop more than a few points with each missed payment. When you apply for more credit, though, your potential creditors will look at more than just the credit score. Your payment history with other creditors will definitely come into play when they are making the decision to approve you. You could end up with higher interest rates because of your decision.

One mistake that may surprise you is the decision to settle with a lender on a past due account. Of course, this is a quick way to have a debt removed from your life. The settlement will not disappear from your credit report, however. It will, instead, be marked as a deficiency balance on your credit report. You may be able to negotiate terms that keep your lender from reporting the deficiency, but the best idea is to negotiate payments that will make paying the full amount a possibility.

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Easily Understand and Improve Your Credit Score

If you have ever received your credit report, then you know that it can be difficult to make heads or tails of it. There are a few easy ways to understand exactly what you are looking at, but there are a few things that you should remember. First of all, the credit score is probably the most important aspect of the entire credit report. This is the first thing that any potential creditor will see when you are attempting to make a purchase. The score can read between 300 and 850, with 300 being a very poor credit rating, and 850 being a perfect credit score. Most credit scores will fall between 400 and 750.

A credit scoring of 680 to 700 is considered an excellent score. Higher credit scores will possibly grant you preferential treatment from potential lenders, and will likely earn you lower interest rates on any new loans. You are considered a very low credit risk when you carry credit scores this high, because it is obvious to lenders that you take your finances seriously and pay all bills on time.

There are three different credit reporting bureaus: Equifax, Experian, and TransUnion. Many lenders will only refer to one credit bureau, which means that any inquiries and approvals will appear only on that particular credit bureau’s report. Larger purchases, such as auto and mortgage loans, will search all three credit bureaus for a more accurate picture of your credit history.

Every creditor on your report will state your payment history. If you find any errors, you may dispute them. The creditor’s phone number should always be readily available on the credit report to make disputing errors easier for you. Do not hesitate to report any errors on your credit report, because it could make a difference of twenty to one hundred points in your credit score.

If your score is lower than you expected, there are several things that you can do to improve it. There are no quick fixes, however. You must be prepared to make all of your bill payments on time. Keep low balances on your credit cards, but do not cancel any of the accounts. Contact creditors if you feel you may need to submit a late payment, because this will often keep the creditor from reporting you to the credit bureaus. In time, you will see your credit scores rising, which will open more doors for you in the future.

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The Problem with Credit (And One Great Solution)

Where does the problem with credit start? Many believe that it is a generational problem dating back to the baby-boomer era. In the old days, when our fathers still knew their fathers and grandfathers, we as a country were recovering from The Great Depression. (Imagine a recession like we have going now but ten times as bad) When the Depression was lifted, the country seemed to learn the concept of credit; it wasn’t a free license to spend. Credit was something valuable, a note or a promise to pay within the month.

Nowadays, we are bombarded with TV advertisements and Internet ads, encouraging us to spend. In the 1950s and 1960s we were not exposed to the shamelessness of today’s modern advertising world. Today, children are being taunted to spend money with their credit card, as if these cards are free gift certificates. Make no mistake about it—the spending problems of the average consumer make up an important part of our nation’s troubled economy.

Whether you are in serious debt or have a perfect credit score that you cherish, you should strongly consider ordering credit repair software. You also have the option of subscribing to a credit-reporting agency that lets you check your credit score as often as you want. This is important, as new credit items can be reported at any time; a once-a-year review will not be much help to you.

If you are in serious debt then you should take steps to make sure that your payments are going through and delinquent notices are being removed as they are paid. If you have perfect credit, then make sure that your credit file is free from fraudulent charges. This happens more often that we would like to think—75% of all credit reports contain erroneous charges!

Be a part of the solution, not the problem. Take your credit score seriously by checking your file on a regular basis.

The 4 Worst Credit Mistakes You Can Make

It’s understandable why you’re in a panic and thinking of taking desperate measures. After all, nobody wants to be in debt. No one wants to be in a bad credit status. The very idea of owning thousands of dollars to your creditors is indeed discouraging. However, no matter how bad the situation gets for you, there is no need to resort to any of these four credit mistakes.

1. File for Bankruptcy

There are almost no advantages to filing for bankruptcy. It bludgeons your credit to death, and in many circumstances, you may still be required to pay off a negotiated balance to your creditors. This is mainly an option for company heads.

2. Attempt to Create a New Credit File

This is against the law. You are only issued one credit file for your legal name. Do not believe anyone that suggests you can change your credit history online.

3. Hire a Credit Consolidator or an Attorney

Honestly, what is this going to do for you? There is a possibility (not a guarantee) that such an expert can stop creditor harassment. However, you will be paying this individual hundreds if not thousands of dollars to do something within your own capacity.

4. Assume Your Credit is Just Fine and Dandy

Now we come to the absolute worst mistake you can make! With over 75% of all credit reports showing erroneous or fraudulent activity, you cannot afford to assume anything when it comes to your financial status. One credit report a year will not suffice when your reputation is on the line.

Why not order credit repair software and bring yourself out of debt? You can also keep tabs on your credit report by working with a credit reporting agency. Regularly checking your credit file is the first step towards a positive change. Avoid these big mistakes and protect your credit!

What Do You Need in Order to Repair Your Credit?

Anyone that is unconcerned with his or her credit score is probably not aware of the prevalence of credit card fraud and identity theft in the U.S. today. Did you know that 75-80% of all credit files have errors or fraudulent charges listed?

How does this happen? These errors could be anything from a duplicate charge to a stolen credit card number. How many times has a person gone into a restaurant, left a receipt showing and had their card number stolen as a result? It happens more often than you think. This is why it’s important to check your credit report more than once a year. When you work with a credit-reporting agency you are not limited to three free reports a year. Instead, you can check all three bureaus and other non-public databases several times a month or even a few times a week if you so desire.

What do you need to repair your own credit? You need to be aware of your informational resources. A credit repair software system could help you in this respect. The process of credit repair will involve writing dispute letters as well as negotiating with creditors individually. Financial discipline, planning and diligence will also be required. Remember that you have the right to request an investigation of any item on your credit rating. If the credit bureau cannot verify authorization, the item must be removed.

If you are making an attempt to fix your credit then you must be able to track your results and see your progress immediately. A credit-reporting agency can help you in this regard. When you have access to your file, you can place a fraud alert status on your credit report. Even if you cannot settle a dispute, you can add a letter to your report that shows new creditors your side of the unresolved issue.

Why not keep one step ahead of all those would-be credit thieves by taking an active interest in your credit report?

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