If you’re about to go through the process of repairing your credit rating then there are a few things you should bear in mind and perhaps avoid.
Here’s a run down of 7 credit repair mistakes that you’ll want to avoid making.
1. Cancelling a current credit card account
Many people don’t realise that closing a credit card account can be a bad decision for your credit rating – especially if the account currently has a balance or if it’s one of your long standing credit cards.
2. Avoid disputing everything on your credit report
Many credit repair companies often take this approach, but there are a few problems with trying to repair your credit rating in this manner. First of all it’s not entirely believable. If you decide to dispute too many items on your credit report then the credit agencies in questions could simply dismiss your claims as frivolous.
Also, it often isn’t in your best interests to have all entries removed as positive accounts on your file will be actually helping your credit rating as they’ll show an example of regularly payments and a cleared debt.
3. Missing some debt payments to pay others
Whilst prioritising your debts is often a good idea, skipping payments in favour of others isn’t. In order to improve your credit score you need to make sure that you don’t miss repayments, if you continue to have late or missed payments then you’ll find your credit score will get worse rather than improve.
4. Send credit agency letters via recorded delivery
If you need to send a letter to any credit report agency, collection agency or lenders, it is always a good idea to send the letter via recorded delivery. This ensures that you have proof that the letter has been both sent and received.
5. Using bankruptcy as a credit repair tactic
Bankruptcy should not be used as a means to repair a credit rating. Filing for bankruptcy will not have a positive effect on your credit rating and will in most cases have a negative effect.
6. Cutting up your store cards and credit cards
A lot of people who experience bad credit often decide to stop using their credit or store cards. But, by using these forms of credit responsibly and paying the monthly payments on time they can help to rebuild your credit as you progress through the repair process.
7. Not requesting your credit report
When setting out to repair credit checking your credit report should be the first thing on your list. By getting a copy of your credit report from the 3 main UK agencies (Equifax, Experian and CallCredit) you’ll be able to easily work out which entries and areas you need to focus on in order to improve your credit.
Without having a look through your credit report it will be a lot harder to spot any troublesome areas.
