Once you have repaired all of the
inaccurate and outdated information on your credit report, it is essential to
take steps to keep your credit score as high as possible. Unfortunately, many
people do not realize all of the activities that can negatively impact their
credit score, and which ones are worse than others. However, with a little
know-how, you can avoid the things which are most toxic to your credit and keep
your credit report squeaky clean.
Bankruptcy and Credit Counseling
Most people know that a bankruptcy can wreak havoc on your credit score and
will remain on your credit report years. However, most people do not realize
that a Chapter 7 bankruptcy is worse than a Chapter 13 bankruptcy. (In a Chapter
7 bankruptcy, all of your debt is discharged. In a Chapter 13 bankruptcy, your
creditors receive a portion of what they are owed before your debt is
discharged.) Do not make the mistake of seeking credit counseling in order to
improve your credit score! Sadly, credit counseling, which many people seek
out to assist them in maintaining their credit, is almost as detrimental to your
credit score as a bankruptcy.
Foreclosures
Any foreclosure lawsuit can also make mincemeat of your credit and can
prevent you from obtaining financing for a home in the future. Therefore,
keeping current on your mortgage payments is one of the most important ways that
you can protect your credit. Even one 30-day-late payment on a mortgage can
impair your ability to obtain home financing. Therefore, treat your mortgage
payments as sacred and pay them timely every month.
Collection Companies If a debt has been sent to collections, you may
rest assured that the debt has appeared on your credit report. In fact, it may
appear more than once, since the creditor and the collection company may
report the debt to the credit bureaus. Therefore, it is worth the time and
effort to try to negotiate a payment plan with creditors if you are not able to
pay the entire debt right away. If you are able to prevent the debt from being
sent to a collection company, you can prevent damage to your credit.