[Y]ou get a lot of advice when you research online about how to improve bad credit. Some of it is not so good, a waste of time or worse. There are three major mistakes that people make when they are trying to rebuild their credit rating.
Mistake #1 – Hiring a Credit Repair Company
You’ll see advertisements on pages about credit from companies that claim they can raise your credit score by 100, 200 or even more points in 30 days. What they fail to tell you is that what they’re doing is just disputing information on your report. While it may disappear for a while, it often returns in the future.
The biggest problem with these companies is that they charge a ridiculous price for their “service.” Some charge a set fee per month while others charge per item. Either way, you’re paying for something that may not work.
Mistake #2 – Applying for a lot of New Credit
One of the best ways to help your credit score to improve is by establishing a positive history with new credit. However, many people start applying for a bunch of credit cards without even researching their requirements. While one inquiry on your credit report from a new creditor won’t have a big impact on your credit score, multiple inquiries could hurt it.
You also reduce your chances of getting approved when you apply and get turned down for credit. Take the time to find out the requirements and which creditors are more likely to approve an application from someone with your credit score.
3. Mistake #3 – Not Checking their Own Report
Before you take any steps to fix your credit, you need to know what is on your report. Get a copy of each of your credit reports from the three credit bureaus and see what information is on them. This allows you to know what is dragging your score down and what you need to work on. You can also find any errors and dispute them, which will also help improve your credit score.
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