Do’s & Dont’s Of Credit Repair

Credit damage can happen for a variety of reasons, such as late payments on credit cards, missing a loan payment, or suffering identity theft. The unexpected or unpreventable sometimes happens. If you’ve found yourself with credit struggles, you aren’t alone. Millions of other Americans find difficulty being approved for credit or loans or, if approved, offered unattractive terms. The good news is you can fix your credit. Credit report repair takes a bit of work but can be done, especially with help. When committing to credit repair, here are the top dos and don’ts.

Do: Check Your Credit Report

If you were denied credit or otherwise determined to have poor credit, don’t take this denial at face value. Check your credit report and ensure it contains accurate information. All consumers are entitled to a report from each of the primary credit reporting agencies (Experian, Equifax, and TransUnion). Errors are more common than you’d think and should be disputed. A professional credit report repair company can help you navigate this process.

Don’t: Ignore Bills

Even if you think you can’t afford to make a payment, see if you can budget monthly payments. If your financial situation prevents you from making payments, the lender should be contacted to see if you can go on a payment plan or other arrangement. Many will work with you if you communicate with them. When it comes to credit repair bills, payments and scores, are all connected.

Do: Take Steps Towards Credit Repair

If you’ve checked your credit report and all seems in order, it’s a good idea to carefully look at your spending situation. This helps determine what is contributing to a decreased credit score.

  • If you have the funds but forget to make payments, set up automatic bill pay.
  • Use cash or debit to make purchases to avoid accumulating more debt.
  • Consider pursuing credit report repair help so you can evaluate your situation and set up a realistic goal to achieve a healthy credit score.

Talking with the experts can help you get back on track and, ultimately, reach financial freedom.

Don’t: Close All Credit Card Accounts

Many people seeking to pay down debt will close credit cards to avoid using them. Realistically, this can negatively impact a credit score, especially if older accounts are closed. Instead, continue to pay down debt and lock away the cards (for now).

Do: Be Patient

Credit report repair doesn’t happen overnight, however, a commitment to a feasible plan will make it happen. It’s important to know it takes time for good credit behaviors to reflect in scores. After about 30-60 days of staying on track, you should start to see results.

Don’t: Transfer Debt from One Card to Another

Transferring debt from one credit card to another to avoid payments only makes things worse. It might offer a temporary reprieve but will catch up with you over time, especially once fees begin to kick in.

Don’t despair if your credit isn’t as strong as you want. There is help! If you’d like to learn more about how Key Credit Repair can help you find a credit report repair solution that will turn your credit situation around, please contact us today for a free consultation.

Paying with credit cards activates your brain to create ‘purchase cravings’ for more spending

You already know that buying things with a credit card puts you at risk of going deeper into debt. It’s just too easy to pay the minimum and push your goal to be debt-free into the next month. But, new research shows that the problems that credit card use can cause are even more insidious than that. Researchers at MIT put volunteers into an MRI to see exactly what is happening inside our brains when we make a purchase with plastic instead of cash.

Credit Cards Light Up Our Reward System

During the study, participants were shown items on a screen that they could add to a virtual shopping cart. Half were given the option to pay with cash, half with a credit card. Those who used the cards were more likely to buy more expensive items. They also spent more overall.

The reason for this could be the brain response associated with using the card. The MRI showed that the region of the brain associated with pleasure and rewards was activated when using the card. This area of the brain is responsible for the release of dopamine. 

Visual cues like credit card logos and buy-now buttons were also shown to prompt cravings for rewards. The study’s authors say that our brains have been chronically sensitized by previous experience with credit cards. Credit cards are associated with enjoyable purchases, so our brains are primed for pleasure when we are anticipating a purchase.

Why Cash Doesn’t Send the Same Signals

One interesting thing that researchers noticed is that paying cash for the same pleasurable purchases doesn’t set off our reward system the same way. This is likely because paying with a credit card instead of paying with cash makes costs abstract. It’s easy to put the money out of your mind when you aren’t physically seeing it leave your hands.

Breaking Overspending Habits

If it is your goal to become debt-free and fix credit issues from the past, the first thing you need to do is readjust your relationship with money. Try to only use cash for recreational purchases like games, restaurant meals, and beauty products. Not only does this ensure that you are only buying what you can pay for right now; you are also likely to make smaller purchases than you would if you were paying with a card.

Changes don’t happen overnight. It can take some time to fix old patterns and replace them with new ones. In the meantime, keep important goals like going debt-free at the forefront. While it doesn’t give the immediate rewards a pleasurable purchase does, the long-term improvement to your wellbeing is worth it.

Need some help getting started? We’ve helped thousands of people with credit repair, so they can accomplish their goals. Get in touch for a free consultation today.