When you have bad credit, it’s a relief to know that it doesn’t need to be permanent and that you can actually do something to improve it. However, some people may commit mistakes which could do more damage to their credit without realizing it. In this article, let’s take a closer look at some things that must be avoided as you work on repairing bad credit.
1. Disputing too many items at once. Do you see errors in your credit report? If these are errors in different accounts, don’t try to point out everything in just one dispute letter. Why is it not advisable? First of all, the credit bureau may not take your dispute seriously. The credit bureau may also take action and investigate only on one of the issues in your letter. If you want to correct all the errors in your report, the best to do is to dispute each matter one at a time.
2. Getting help from the wrong debt relief organization. If you do not know where to start, you can seek advice from a credit counselling agency but you need to be very careful in choosing an agency that can be trusted.
There are credit help agencies out there that are only after one thing- making profit even if that means taking advantage of a person stuck in a bad debt situation. Study the background and reputation of the credit counselling agency before signing up for help.
3. Closing credit card accounts. To be free from bad credit, some people may cancel their credit card without checking if there is a balance left in the account. But did you know that such a move could do more damage to your credit score?
If you really want to cancel a credit card, be sure to zero in your balance. It’s important to ask your credit card issuer to report to the bureaus that you volunteered to close your account and that it was not terminated.
Also, consider how long you’ve had the account. If it’s your first credit card or if you’ve had it for years, closing the account could mean erasing the oldest parts of your credit history which can hurt your credit rating.
4. Consolidating credit card debt with another credit card. A credit card with zero balance transfer rate can be used for consolidating debt. However, it should be done with care. Look for a credit card that offers a reasonable rate that will last and make sure that the rest of the fees are fair. After transferring your balances, pay them off while the zero rate still applies.
5. Not using registered mail in sending letters. When sending a dispute letter to a creditor or to the credit bureau, it’s important to send via First Class Mailing always so you can get the Return to Sender option. Although First Class mailing may cost a little bit but you can be sure that your mail will reach the creditor or credit bureau and not get lost along the way…
About the Author:
Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing personal loans and credit cards to people with bad credit.