Unfortunately, bad credit is a big problem for many Americans. If you are one of the many struggling with the effects of poor credit, it is important to recognize that it is not a permanent situation, nor does it have to halt all of your plans. While financial life will be a challenge for a time, there are ways you can improve your current situation.
The following tips will help you avoid top mistakes, thus making your credit score worse:
1. Don’t Fall Victim to Scams
A survey released by the Federal Trade Commission in 2013 revealed that 25 million people had been victimized by fraud. Of this group of Americans, an estimated 1.5 million and 1.7 million were scammed by debt relief or credit repair scams, respectively. The FTC warns consumers to avoid any agency that raises red flags, like: insisting you pay money upfront, requires that you don’t contact the credit reporting companies directly, insists you falsify information on applications for credit or a loan, and/or suggests that you dispute accurate information on your credit report.
2. Don’t Pay Bills Late, or Not at All
If you are already dealing with bad credit, the overwhelming situation could lead to the thought, I can’t handle this credit card bill right now. In the grand scheme of things, does it really matter if I skip another month’s payment? This one of the biggest mistakes that will seriously hurt your credit score. When you completely ignore your credit card bills, creditors will think you are not going to pay your credit card bills at all. They will then charge off your account, which is one of the worst things for your credit score.
3. Learn from Past Credit Mistakes
A bad credit score does not have to halt all your plans. To move forward, you first need to learn from your credit mistakes and educate yourself on what steps are needed to rebuild your credit score. For example, the aspiring entrepreneur can still consider getting a merchant account with bad credit. A high-risk provider like EMerchantBroker.com specializes in helping merchants rebuild their credit score, while also moving forward with their business plans.
4. Avoid Maxing out Credit Cards
There are many reasons why maxing out your credit cards is a bad idea. A large part of your credit score – 30 percent, to be exact – is based on how much of your credit you are using. When you max out your credit card, it means that your credit utilization is 100 percent; the closer your credit card balances are to your credit limit, the more it hurts your credit score.
5. Face the Problem Head-on
By far the worst mistake you can make, avoiding your bad credit situation altogether will only lead to bigger problems later. It will also cost you more time, energy and stress. Push your credit score to the top of your to-do-list, consider ways you can negotiate any credit card debt and contact creditors to request a payment arrangement or a change in terms. Be proactive when it comes to rebuilding your credit score, you will thank yourself down the road.
Author Bio: Electronic payments expert, Blair Thomas, co-founded eMerchantBroker. His passions include producing music, and traveling to far off exotic places. eMerchantBroker is America’s No. 1 getting a merchant account with bad credit company, serving both traditional and high-risk merchants.