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10 Mistakes

Frequently Made Mistakes


Paying Collection Accounts: Paying on older collection accounts can renew the statute of limitations on the debt while lowering your credit scores due to the recent collection activity on your credit. Paying on a collection account does not remove the item come from your credit report. Before paying on a collection, be sure to validate the debt with the creditor to avoid paying on scams.


Disputing Online: While it may seem convenient, disputing your accounts online can end up hurting you. The Fair and Accurate Credit Transaction Act amended the Fair Credit Reporting Act in 2003 allowing the dispute process to be performed online, but doing so, you may waive many rights afforded to you under the FCRA and limit options for removing inaccurate items from your report in the future.


Maxing Out Credit Limits: Just because you have the credit available to you does not mean you have to use it. Charging more than 30% of your limit can hurt your scores as well as carrying balances for long periods of time. Be sure to pay down your cards, and pay them off regularly.


Keeping Up With The Jones': While it may be tempting to out-do your neighbors, family, or friends with the latest and greatest widget, it may not be the wisest thing. If you know you will get a higher interest rate loan, it is better to finance a smaller amount to pay it off quickly and save the higher amounts to finance when your credit is improved saving you hundreds if not thousands of dollars in interest.


Cosigning For Friends And Family: While your heart may be in the right place, cosigning for people you know can be very dangerous to your credit. Often times the people we care about get embarrassed when they cannot pay their bills and do not tell you. When cosigning, you are just as responsible for the debt as the person you cosigned with. You "guaranteed" the loan would be paid. If it isn't then you are either stuck paying the bill or damaging your credit.


Avoid Scams And Quick Fixes: If someone were to offer to remove your credit or get you a certain score increase in 30 days or less, or coach you to open up a CPN (Credit Privacy Number) or a new credit file, run. Your credit did not get damaged overnight, and it will not be fixed over night. Often times these types of scams require you to pay large sums of money upfront. It is illegal for a credit repair organization to charge upfront for their services. Beware of companies that charge upfront as they may take your money and you may never hear from them again. If it sounds too good to be true, then it probably is!


Signing Up For Credit Repair Services If You Are Behind On Your Bills: When signing up for a credit repair program, be sure that you can stay current on your bills. Having slip ups while in the program can set your progress back. It is better to hold off on repairing your credit until you have stopped the bleeding in your finances. There is nothing worse than taking 1 step forward and 2 steps back.


Listening To People Who Do Not Know Much About Credit: It seems that there are experts everywhere nowadays ready to give you advice on anything you need. Credit can be a tricky subject and there are a lot of bad myths people buy into that can hurt your credit even more. Be careful when taking advice from someone regarding credit if they are not truly an expert. It has taken us years to attain our level of expertise. If you have any questions, we are more than willing to get you the right answer!


Not Responding To A Summons To Court: Being sued is a terrifying event and all too often it seems that the easiest way to deal with it is to pretend it never happened. Not responding to a summons to court can be a costly mistake which can end up with you paying a higher amount, wage garnishment, asset seizure, and garnishment of your bank account. If you are ever summoned, be sure to contact and attorney and get the summons answered to avoid default judgments. Your creditors are banking on you not showing up, and often times, showing up is all it takes to win the battle!


Not Using Pagán Professional & Financial Services, LLC's Credit Services: Granted, you can repair your own credit, change your own oil, represent yourself in court, even give yourself a haircut. But why not save time and headaches by going with a company that has helped many people in worse situations than yours. We have the tools and knowledge it takes to improve your credit picture and get your life on track. Don't settle for anything less!

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