There are four credit “dangers” you should always have on your radar. If you’re not careful, these situations can sneak up on you and lead to a credit disaster. So let’s be sure you know how to avoid them…

Unpaid bills

This may seem like a no-brainer, but you’d be surprised at how many people don’t realize that unpaid bills can hurt their credit. If you skip payments on anything from your mortgage or car loanto a $25 credit card paymentyour credit score can drop. Even late payments can negatively affect your score.

The biggest culprit for many people is an unpaid medical bill. It’s easy to see how it happens: you assume your insurance company is taking care of the bills and they don’t get paid. It’s usually a simple mix-up of what your insurance company does and does not cover.

Unfortunately, this confusion can result in a collections record on your credit report (and those stay on your report for at least seven years). So it’s important to fully understand your insurance coverage and make sure your medical bills are paid. And if a collections account appears on your credit report due to a mistake, be sure to work with the parties involved to get the issue resolved.

Identity theft

When someone steals your identity and goes crazy with your creditit can mean chaos for your credit report. It is a real problem these days. But if you know how to protect your identity, you have a better chance of protecting your credit.

Are you taking steps to cut down on your risk? You should start with the following: shred everything with your name on it before you throw it away…only use your credit card on websites you know are safe…don’t carry your Social Security card in your wallet…and consider paying your bills online or with automatic payment (less mail for thieves to get their hands on).

You should also consider signing up for credit monitoring. It’s an easy way to keep a close eye on any changes to your credit.

Divorce

After the hassles of going through a divorce, the last thing you need is to have your credit suffer because your ex-spouse is racking up credit card bills or missing payments. So get your credit report and make sure all joint and co-signed accounts from your marriage are closed or refinanced as soon as you can.

Judgments

The verdict is in: most judgments such as small claims, civil suits and tax liens are guilty of tainting your credit standing. These can remain on your credit report for seven years or longer. And that can make it harder for you to get the best interest rates on loans.

You see, credit doesn’t have to be scary. The more you know, the easier it is to stop things from sneaking up on you.

A good credit repair company will abide by the local, state and federal laws that protect consumers from being scammed from companies that claim to offer credit repair with credit repair services. This includes the following federal laws: The Fair Credit Reporting Act, the Fair Credit Billing Act and the Fair Debt Collection Practices Act.

A legitimate credit repair company will operate their business with the utmost integrity. They will use credit repair services to legally help you. Legal credit repair can help you get the results you need in order to improve your credit and increase your credit score. A good company will go through the legal process in order to help you get erroneous or outdated items removed from your credit report.

They will keep you abreast of what is going on with your credit and how the credit repair process works. Credit repair services can work to get you out of dire straits with your credit. The company will advise you with information that you need to know in order to make changes and improve your credit and financial situation. They will also advise you as to how you can create a budget and learn not to spend so much money. Excessive spending is what gets most people in a credit and financial rut.

A good credit repair company uses the Fair Credit Reporting Act to get some of those items removed from your credit report. They also help you with other credit repair services such as loans or just creating a repayment plan that you pay to them. The payments must be timely in order for you to see an improvement in your credit report and credit score.

It’s important for a good credit repair company to be realistic with their clients. Depending on their situation, it could take a few months or a year or more to get your credit back in working order. Credit repair services work to help you to get you back on track with your credit. Having your credit back in shape is one of the best things you can have. It’s your lifeline to getting goods and services on credit.

A good credit repair company will not scam nor trick you into doing things that are not legal or ethical. If they did that, they would be out of business in an instant. Having a good company to provide the credit repair services that you need is a win-win situation for you and them. If you approve of their services, then you may want to refer someone else who needs some assistance on some of the same or related issues.