10 Things Hurting Your Credit – How To Fix Credit Report Errors

Introduction

You have been paying your bills and debts timely, yet if you are facing an issue with your low credit scores then you might have to see your credit report and learn how to fix credit report errors to better perform financially. Because once a mistake is twice a habit. And when it comes to financing, these habits are what will make you or break you.

Many people are afraid of having a credit card, but whether you are a salaried employee or a business owner, regardless of how much you have in your bank, building a credit score will benefit you in the long run when taking a loan. Most people are aware of what hurts their credit score. Some of the basic practices that might be harmful to your credit score may include: not paying timely taxes, putting off your payments, foreclosures, and not overusing credit.

But if you don’t know much about other things that might be secretly hurting your credit score, here are 10 ways how to fix credit report errors. We have compiled quick fixes to educate you on your finances so that you can be better informed on your financial choices. Let us see how you can avoid credit consequences and improve your credit score:

Discover 10 Ways To Fix Credit Report Errors

How To Fix Credit Report Errors #1. Canceling zero balance credit cards

If your card issuer is charging you a high annual fee on your credit card then canceling it might be a better option. But if you have a lower annual fee on your card and a zero balance, you might want to keep the card anyway to continue the span of your credit history shortly. Hold onto it to increase your credit utilization ratio down the road so that you can benefit. Additionally, you can negotiate with your card issuers for lower rates, downgrade your card with no APR, or use it sparingly.

How To Fix Credit Report Errors #2. Maxing out credit utilization

Check your FICO score before overutilizing your credit card. Maxing out on a credit card might have serious economical consequences on the owner making you look unreliable and risky for your current or potential lenders. You might be lowering your score down to 40 points if you exceed 30% of your credit utilization. Keep your balance calculated on the overall available credit to stay on the safe side over your expenses and credit score.

How To Fix Credit Report Errors #3. A co-signer deal gone into debt

You have a credit score of 800 and a big heart. Now, you have co-signed a deal for your friend, family, or a well-wisher and they are unable to pay their debts in time. Thanks to bank policies, they won’t look for the reason why your friend might have not paid their due. Their next target is you, and if you can’t pay either – your good credit score will be long gone. The “How to fix credit report errors” question will no longer be valid with your dented credit card, as this might not be an error, all together a legal issue if prolonged.

However, this should not scare you from co-signing a deal if you can trust your friend on their repayment capabilities.

How To Fix Credit Report Errors #4. You don’t have any credit history

Well, if you are a novice and have no credit history or even a credit card, your lender wouldn’t have any information on your capabilities to keep their trust in your authenticity.

Whether you have stopped using a credit or have no credit, there is no way that a bank can offer you a loan on your future purchases where a larger sum may be required. A sum larger – more than your debit amount can take up. And if you apply for a credit card in the future, keep using it to show a consistent credit history on your report even if you have a large sum in cash to spend on your expenses.

How To Fix Credit Report Errors #5. Unpaid parking tickets, library fines, or medical debts

Unpaid bills are what we call these. Whether you have not paid a fine on your parking ticket, medical bill, electricity bills, or even library fines, any type of unpaid bills or debts may hurt your credit score largely. This shows the lender that you are not reliable on your repayments and they cannot trust you with a loan.

However, paying these bills in full can prompt the agent to remove the debt from your credit report or you can even draft a goodwill letter requesting the card issuer or the lender to remove any information from the report that might hurt your chances of getting a loan.

How To Fix Credit Report Errors #6. Balance transfer to a single card

This points out a lack of credit mix. Although it might be convenient to have one credit card altogether, creating one high balance combined will hurt your utilization report and thus your score.

Asking yourself how to fix credit report errors won’t do any good if you do not qualify for the basic requirements all together. Having a mix of cards is important just as much as having a clean record.

How To Fix Credit Report Errors #7. Too many credit inquiries

This might sound funny and absurd, but when you are applying for a loan and a lender pulls out your credit file for a review, it is called a credit inquiry or hard inquiry. This means you are applying for multiple loans at too many places, too fast. But if this is regarding rate shopping on your mortgage or your auto loan in a shorter span, typically of 45 days, the inquiry will count as one, instead of multiple.

Keeping credit inquiries to minimum will answer your credit in positive ways. Though the inquiry costs low points, they will stay on your credit card for 2 years and affect your future purchases for not more than a year. With a positive credit, you no longer need to worry about asking yourself how to fix credit report errors.

How To Fix Credit Report Errors #How To Fix Credit Report Errors #8. Too many or too low credit cards

Having too many or too low credit cards may hurt your credit score. Too many credit cards may eat up your points from multiple hard inquiries as mentioned above, and a lack of diversity will also hurt your credit history since it is not made up of a single card alone. Therefore having a mix of cards will help your credit mix, which accounts for 10% of your credit report.

The idea behind this is to give your lender a sense of trust in your repayment capabilities and responsibilities of handling a larger sum. However, if you have no use of credit cards for more than two, then two should be fine until you are paying off your bills and debts in time.

How To Fix Credit Report Errors #9. Financing a major purchase

Even with an excellent credit score, larger loans are always a problem when not paid in time. They have higher interest rates, higher EMIs, and higher down payments. Talk with your lender about how the loan affects your credit and chart out a plan where you can make timely payments. But if there is an emergency and you are using the total amount on your credit along with the safe balance, you are maxing out on your credit and are at higher credit risk. Look at different ways you can make this work than maxing out on your credit.

How To Fix Credit Report Errors #10. Bankruptcy

Last but not the least, filing for bankruptcy loses a greater number of points on your credit score, up to 250 or even more. Also, this type of negligence can stay on your records for up to 10 years with no way to keep up with a clean record with such negative feedback on your expenses.

The most you can do about how to fix credit report errors is to avoid this and maintain your expenses, keep a track of your credit history, negotiate with your bankers, and lower your usage.

How To Fix Credit Report Errors – Summary By Lexington

The Bottom Line

There are many solution to how to fix credit report errors and there are many chances to improve it even if you don’t have one. Therefore it is always important to take notes on your credit history and check your report once in a while to know where you are making mistakes and avoid making them

If you are still unsure how to fix credit report errors or where to apply for a loan, give us a call at Blue Carz and schedule a free consultation with our representative, who will take you through the process of increasing your credit score without having to be rejected by a lender or sweat in losses.