Common Credit Mistakes We All Make But Shouldn’t

Paying Off or Settling Collections

This is generally a bad idea, as it will cause your score to drop as your activity date gets renewed. However, let’s say an underwriter is forcing you to take care of it for a loan. We suggest paying off the collection account right before closing the new loan and provide the paid-off document to the underwriting department. This way the payoff doesn’t have time to negatively impact your score.

Closing Down Revolving Accounts

Most people do not realize that closing out trade lines can significantly lower credit scores. You need at least one revolving account to meet the minimum criteria of the scoring algorithms used by all three credit bureaus.

Paying Off Auto & Student Loans

When you pay off your installment accounts they close naturally, and then you lose your length of credit history. A better approach is to simply pay the minimum amount for as long as possible.

Student Loan Collections

Most student loans are government backed so they don’t just disappear after a certain amount of time. And very few lenders hand out significant sums of capital with student loans in collection status. Therefore, we suggest getting on a new payment plan and making sure that part of the payment plan includes a requirement that the status of the loan(s) be put back into good standing.

Acquiring Positive Credit

When it comes to building up credit history, don’t go nuts – less can be more. Apply for one secured credit card and use it sparingly each month. Make sure you have at least three open and active trade lines at any time. You can even try acquiring a couple of positive credit accounts from a close relative.

Disputes

Disputes are nightmares in the credit world. We work with a company that specializes in disputes. Our suggestion is to let one of our representatives handle any disputes that you may have. Knowing exactly what the laws are and having the experience and tools to actively handle a dispute can be the difference between a high and a low interest rate, or getting approved for financing at all. Let the people who specialize in this area take care of your disputes before they cost you more than they already have.

Request A Free Credit Consultation Now!

Don’t live with a low credit score or a disputed trade-line. Request a free credit consultation today and get the information you need to make an informed decision. A credit repair specialist will respond with a specific plan to improve your credit and present you options to move forward. There is no obligation to move forward, but if you do you will receive Kingswood’s promotional rate as a benefit. Learning what you can do to maximize your credit score can literally save you thousands of dollars of your own money. Don’t delay – request your free credit consultation today!