A bad credit score is a problem that a lot of people face. From naïve mistakes made when younger to financial troubles caused through redundancy, there are many different reasons why people fall into the trap of a poor credit rating. However, the good news is that this score does not need to stick with you forever. There are ways to rectify it. Nonetheless, the last thing you want to do is cause even more damage, so let’s take a look at the credit repair mistakes you need to avoid.
Filing for bankruptcy – A lot of people file for bankruptcy because they see it as a quick fix. This is not something you should use as a credit repair tactic. While it can be beneficial in some cases, it can also make your credit score a lot worse. Plus, bankruptcy will remain on your credit check for around ten years, which will make it extremely difficult for you to get a loan or a credit card over the next decade. Even worse bankruptcy comes off your credit report; it can still haunt you, as a lot of lenders will ask whether you have ever filed for bankruptcy.
Not repairing your credit at all – One of the biggest errors you can make is simply forgetting about your credit score and putting it to the back of your mind. It will come back to haunt you when you want to buy a house or start your own business.
Not borrowing money – Many people feel the only way to fix their credit rating is by stopping borrowing money altogether. While this will stop your credit rating from getting worse, it won’t necessarily make it get any better. Borrowing money the right way can boost your rating, however. By taking out a loan and paying it back on time, you show that you are a credible person to lend to, and this can improve your score. Taking out a bad credit rating mobile phone contract from the likes of Zaggor.com is a good place to start. This is likely an item that you need, and the monthly repayments won’t be too substantial, so it’s a great way of showing you can make repayments.
Cutting up your credit cards – There seems to be this common misconception that cutting up your credit cards is a great way to improve your credit score. In fact, cutting up your credit cards won’t make a difference. You will need to call up the credit card company and cancel your account if you want to clean up your credit rating. Don’t be so hasty to cut them all up, as using a credit card correctly is a good way to repair the damage on your rating.
Playing the balance transfer game – Last but not least, you are only postponing the inevitable if you transfer credit card balances to avoid making a payment. This tactic is only going to get you so far, as interest fees will be added every month. This means that the amount of money you owe is going to get bigger and bigger each month, which will make your credit issue so much more difficult to rectify.