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3 Grievous Errors to Ending Your Credit Rating Disaster Countdown

23 Dec , 2014  

The new year’s coming. Scary thought. I’m sure many of you will watch the countdown and the proverbial ball drop as the confetti sprays up and noisemakers ring in a sparkly 2015, and undoubtedly you’re all going to be thinking of what kind of New Year’s resolution you should make. Let one of your resolutions be this: fix your credit rating.new year credit repair

Getting Credit Ratings Right Isn’t an Easy Task, Though

This is especially the case if your credit rating’s terrible! Why do those ratings matter? It’s simple. You want to prospect home ownership, don’t you? Why else do you think the H.O.P.E. Program’s around, helping those recover and eliminate as many blemishes as possible?

Owning a home is the premium accomplishment of our age. It’s the American Dream. Getting the keys to the house is equivalent to accepting an Oscar for your role as Batman or Superman, for crying out loud. It’s next to godliness. When you hope to own, you hope for the future. But like I said — it’s not as easy as it looks, because there are some pitfalls for you to watch out for. Three pitfalls, to be exact.

Watch Out for Some Credit Repair Clinics Out There

Credit scores are the stamp of approvals, undoubtedly, so it’s no surprise that there are numerous credit repair companies out there, credit consolidation corporations and other credit watchdogs barking their calls to creditors to stop the calling, remove the balances and get those reports looking spotless. Rest assured: their intentions are good. Some clinics, though, pave the way to Hell with the good intentions, and in the end, the consumer, you, end up suffering even more than you already are.

red wine credit repairWhat you have to understand is that many creditors will do what’s called a “soft delete.” An okay, but “not really” underneath their breath. You see, those credit repair clinics can bark all they want to creditors; but to get them to stop, all creditors would have to do is wipe it clean but then bring them back after the clinic has done the supposed job.

It’s like cleaning a carpet only for the kid to spill red wine all over it again.

The result is a cost to the clinic repeatedly, like an addiction, if you will, because the negative reports on your credit rating keep cropping back up needlessly. Just another expense on your wallet you have to constantly worry about.

Closing Old Accounts Won’t Benefit You Either

Since we’ve got that out of the way, it’s pretty obvious: you can, in fact, repair your credit rating on your own. It will, however, take some dedication on your part. Write goodwill letters to your creditors. Negotiate. Settle. Get the debt eliminated however you can. Pay off your bills on time. You’ll undoubtedly see a transformation to your credit rating —

When you pay those accounts off, though, don’t fall into this trap: closing them out completely. Why? Believe it or not, but a “closed” accountClosed_Sign on your credit score isn’t necessarily a good thing. It can, in fact, be a bad omen to some people reviewing scores for the prospect of homeownership, or even leasing a vehicle. Closed accounts can sometimes mean “written-off” accounts for unpaid debt. Unpaid debt is truly a bad omen when it comes to owning a home, right?

Instead, simply pay off whatever balance and let that account sit there on your credit rating. Don’t do anything to it. You might not use the account anymore for anything, and that’s fine — but why close it down when it looks good on your credit? Leave it on there.

Multiple Credit Card Applications Can Also Leave a Stain on the Carpet

You can bet your financial horses that this form of “window shopping” won’t help you, and it’s unfortunate. Interest rates vary, yes, and you can never know that one credit card account might benefit you better than another, but definitely don’t shop around and compare. It’ll look bad on your credit rating.

This doesn’t, however, apply to mortgages and car loans, as ‘rate shopping’ is allowed, so much so that you can practically apply for as many as 20 mortgages if you want within a month and a half, and the inquiry on your credit report will only show up as one listing. Yes, a simple credit cards credit repairinquiry will affect your credit score, but that one listing is a whole lot better than 20 total on your rating, and you can bet your stars that so much of that will adversely drop your score just a tad.

Typically, revolving credit card accounts count each inquiry as one, so the more you have within a year, the lower your FICO score. Go easy on the credit cards, please.

Keep It Clean

At the end of it all, even when you avoid these errors, you’re going to be a watchdog. Pay close attention to your credit and pay your bills regularly. You might even see errors on your credit report as well, and this is where you, the watchdog, can start barking. Get it fixed. Perhaps it wasn’t on your end that hurt your credit rating. It does happen.

Whatever the case, know this: you’re in charge. You’re the top spot. And your credit rating will swing you to every corner of success as a result. Contact the HOPE Program today to learn more about how to ring in the new year the right way.

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