The American Consumer & Credit Score Repair
The average American has a credit score around 690, which is a long way from the “perfect” score of 850. Most lenders won’t even consider your application for a loan or financing without a credit score of 720 at minimum, so many people are caught in the endless loop of trying to repair their credit.
Even if you’ve done your homework on credit repair, you may still be missing a few key mistakes that can keep you from living the dream of credit freedom. Usually, these minor but disastrous mistakes are one of five common mistakes.
The Top Five Arizona Credit Repair Mistakes
While there may be many factors that might adversely affect your credit score – far too many to list here – there are a few common issues that might be dragging you down. The big five are:
• High Credit Card Balances – Even if you’re making payments every month on a credit card, carrying an outstanding balance quickly becomes a liability for your credit score – especially if that balance is too close to your credit limit.
While it is true that you need to have an open credit account to continue building or repairing your credit, excessive debt does not work in your favor. If your credit limit is $5,000 and you are maintaining a balance of around $500, you could be causing your credit score to drop as much as 100 points.
It is much better to pay off your complete balance every month then make new, small charges that you can pay off the next billing cycle. This shows that you police your credit accounts well and are capable of paying off your debts.
• Late Payments – As much as 35% of your total credit score depends entirely on your ability to make payments in a timely manner. The absolute worst thing you can do for your credit is miss a payment, but making payments late is almost as bad.
In fact, even paying right-on-time can be detrimental to your credit score. The best bet for raising your credit score is paying your monthly payments just before the lender sends out their monthly statements.
• Closing Credit Cards – It stands to reason that if you are in debt you can close your credit card completely to avoid acquiring more debt. This is actually a very bad decision if you’re looking to repair your credit. Closing a credit card closes that entire line of credit, which reduces your overall available credit.
If you have two credit cards with a limit of $2,000 you have a total available credit of $4,000. If you close one of those cards, you split your available credit in half. It is usually a better tactic to keep the cards open and pay them off as you go.
• Avoiding Medical Costs – It is a myth that outstanding medical debt doesn’t affect your credit score, plain and simple. While most medical offices don’t report directly to the credit bureaus, they often send those bills on to a collection agency, which can very quickly cause your credit score to plummet.
Keep those medical bills out of collection at all costs. Some medical professionals might even strike a deal with you and accept a very small monthly amount or offer other financial assistance. Whatever the case, don’t stop paying them.
• Bankruptcy – While bankruptcy is sometimes the only way out of massive credit debt, a move like that suggests that you cannot, will not, and do not pay your dept. Bankruptcy can lower your credit score by 150 points or more, which can take many years to repair. If at all possible, keep paying your debt and do not file for bankruptcy.
Professional Counselling From The Best Arizona Credit Repair Experts
Obviously, repairing your credit score is often a complex, confusing, and counter-intuitive undertaking. Seeking a professional Arizona credit repair firm can send you time, money, and a whole lot of frustration.
Contact Credit Absolute today, we’d love to talk to you about how we can help get your credit score back on track.