If you’re dealing with bad credit, you’re certainly not alone. Thousands of Americans have found themselves in this situation after living beyond their means, losing their jobs, or simply finding that they no longer fit into the new definition of a good credit score. If you’re at a loss for how to repair your credit, here are three credit repair mistakes to avoid when you get going on your DIY credit repair.
1. Using a Credit Repair Company
These companies are really in it for nothing but the money. They’ll end up costing you a small fortune, and they won’t do anything you can’t do on your own. The Internet is rich with resources to teach you how to repair your own credit. There is even some great credit repair software on the market right now that can help you every step of the way. In short, there’s no reason to hire a company like this. You can do this on your own with the resources that are easily available today.
2. Not Getting All Three Reports and Scores
Many people become concerned about credit repair first because they get one of their credit reports and see that it’s full of mistakes. If this is the case, it’s not unlikely that your other two reports are also riddled with problems. Over half of all credit reports have been shown to have mistakes on them, so you definitely need to check all three major credit reports and scores when you first start repairing your credit. You can get free credit reports from each company once a year, though you’ll have to pay a small fee to see your actual score. Once you’re on the road to recovery, you can just stagger your reports, getting one from each company at different times of the year.
3. Paying Down the Wrong Debt
Most people are aware that the best way to improve a credit score is to pay down some debt. The biggest part of your score, after all, is your debt to credit ratio. However, some debt weighs more heavily with your score than others. The most volatile type of bad debt in a credit company’s formula is store credit, so this should go first. Credit cards come next, and after that you can work on other types of debt. If you really want to fix your score fast, you’ll work on your debt in this particular order.