5 Things You Shouldn’t Do When You Have Bad Credit

You don’t need a degree in rocket science to be aware of the fact that having good credit is vital to your financial health. You’d have to be living under a rock to not have heard advice on how to keep on top of our payments and not to use up too much of our credit.
So then, what does happen when that advice goes unheeded and you find yourself with a bad credit score? The obvious would be to look at ways to fix the bad credit, but you’re about to find out about 5 things you should never do when trying to repair your bad credit score.
Tip #1 - Never close your credit cards
An unused credit card has 10X more value than not having a credit card at all. How does closing a credit card affect you? Well, by closing it, you are (obviously) reducing your credit limit, which automatically increases your service-to-debt ratio. Since credit reporting agencies consider debt-to-service ratio a large part of their scoring criteria, this will have a negative impact on your score.
Tip #2 - Turning to credit repair agencies
From the radio to TV to the internet, ads for credit repair are all over the place and practically inescapable unless you avoid media altogether. So it’s only natural for you to think of them first when you want to deal with your bad credit score.
These “agencies” are nowhere near as friendly and helpful as they appear in their ads. They tend to charge rather hefty fees (we’re talking as much as $5K) to repair your credit for you, when the steps they take are steps you could manage yourself.
Some of that money you pay them will be used to pay to have accurate reporting removed. The good news is that your score will enjoy a sudden boost after that. The downside is that this information will always reappear on your report in a month or so and your score will suffer as a result.
Tip# 3 - Turning to debt forgiveness
Debt forgiveness or paying less than the total amount you owe can also sound appealing, but don’t be fooled.
When all you want to do is get out of debt and fix your bad credit score, it can be tempting to choose what appears like an easy solution. Debt forgiveness is really not what it sounds like.
If  you do get one of your creditors to “forgive” your debt, here is what will really happen: the amount of the debt that is taken off what you owe will be reported as unpaid and stick with you report for an entire seven years.

Try your best to create a budget that will finance the remainder of your debt and simply tough it out. Even if it takes you another year to work your way through it, it’s still far better than having that black mark on your credit report.
Conclusion
Think debt consolidation loans or bad credit loans might provide you with a helpful fix? Please feel free to reach out to LoanAway to learn more: (866) 689-0091.



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