subject: Three Things to AVOID when trying to raise your credit score [print this page] Three Things to AVOID when trying to raise your credit score
By: Calvin BurnettThis is an article about credit repair facts. Facts are important. Facts tell the truth. Facts, it seems, have been pretty hard to come by lately. So, let's get to some facts about credit scores. Let's face it: credit scores just don't go as far as they used to. As of now, it is tougher to get financing for a new Texas mortgage than it has been over the past few years. This is because underwriting guidelines have become more strict and many people's credit has taken a hit for one reason or another. However, the fact is that you can do something about it. But, what steps should you be taking? You would be surprised to find what can help, or hinder, your score. For most lenders, the minimum mid-score for which they can get approved is 620. For these potential borrowers, the first step to getting a new loan begins with rebuilding their credit. While paying down active credit card balances or getting rid of a recent collection can help their score, there are some things for which you should definitely be mindful. Amidst the panic of declining credit scores and financial instability, there have been some misconceptions about credit repair that have actually hurt borrower's credit. Here are some of those mistakes. #1--Paying off old collectionsAs crazy as it sounds, paying off a collection account that is older than 2 years can sometimes hurt your credit score. The reason you can be penalized for this is that activity on older collection accounts can be viewed as recent, so you are better served to pay down your credit card balances on active cards. #2--Closing too many credit cardsMany people try to make their credit look better by paying off all their debt and then closing all their unused credit cards. However, you need to have active trade lines on your credit report. Usually, you'll want to have at around 3. Many times, the best thing to do is pay off the remaining balances on your active credit cards (see Mistake #1 above) and leave the cards open so you still have access to credit. Many borrower's initial reaction is to close down accounts so that they won't get 'over their heads' in credit card debt, but as long as you can pay off those debts, you're making progress.A good rule of thumb is, as mentioned previously, to have around 3 cards. If you have more, don't worry, just be smart. It is wise to have multiple cards so you can make periodic payments instead of one lump sum. Just always make an agreement with yourself that whatever you purchase, you can pay off in full. Mistake #3--Letting current mortgages fall behindOf all your debts the lender will look at, your mortgage payment history will definitely be under the microscope the most. If you get into a position where you have to choose between making your mortgage payment or the minimum payment on a credit card, choose the mortgage. After all, your home is the asset that can be foreclosed upon. It comes down to prioritizing. Like most things, if you chip away at debts in manageable pieces, you'll be better off in the long run--not to mention you're blood pressure won't skyrocket!I certainly hope that you find these tips helpful. If you have any further questions, you can always call us, or fill out our Credit Repair Form and we'll get right back to you. It's okay to have less than stellar credit. However, what's not okay is to just let it sit there. Take action, and I promise you'll see your score rise so that you can get into the home you've always wanted. That's a fact. http://www.articlesbase.com/credit-articles/three-things-to-avoid-when-trying-to-raise-your-credit-score-2746691.html
