Good credit is well worth the effort it takes to both achieve and preserve it.  If you have good credit, the following tips will help you keep it that way.  If you are looking to improve your credit, however, now is the time to get started.  If you plan on entering any type of new loan or debt restructure transaction in the next 6 to 12 months you simply cannot afford to make the following credit mistakes:

Dont fall behind on existing accounts.  This includes all accounts, especially your mortgage and car payments.  One 30-day late can cost you from 30-75 points.

Dont pay off old collections or judgements during the loan process.  Paying collections will decrease your credit score immediately due to the “date of last activity” becoming recent.  If you want to pay off old accounts, do it through closing, and make sure that 1) you validate the debt is yours, and 2) the creditor agrees to give you a letter of deletion.

Don’t close credit card accounts.  If you close a credit card account, it will appear to FICO that your debt ratio has gone up.  Also, closing a card will affect other factors in the score such as length of credit history.  If you have to close a credit card account, do it after your closing, and make sure that it is an account you have opened more recently.

Don’t max out or overcharge your credit accounts.  This is the fastest way to bring an immediate drop of 50-100 points in your score.  Try to keep your credit cards below 30% of the available limit at all times.  If you decide to pay down your balances, do it across the board.  Meaning, make an extra payment on all your cards at the same time.

Don’t consolidate your debt on to 1 or 2 cards.  It seems like it would be the smart thing to do, however, when you consolidate your debts on to one card, it appears that you are maxed out on that card and the system will penalize you as mentioned above. 

Don’t do anything that would cause a red flag to be raised by the scoring system.  This would include adding new accounts, co-signing a loan, or changing your name or address with the bureaus. 

Don’t do it alone.  If you feel the credit challenges you are facing are too much, or you don’t have the time to do the work necessary to repair your own credit, don’t lose hope and give up.  Give us a call at 1-888-456-5635; We can help.  In many cases, small changes to your credit profile can yield big results that save thousands on your debts.  However, if professional credit repair does become necessary, we’ll gladly provide you with a referral to an experienced, professional, credit repair specialist you can trust.

Your friend,

Robert Weinberg