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Illinois debt relief: Credit report mistakes that can cost you

It's no surprise that there are many people in Illinois that have credit cards. Unfortunately, some of those people unintentionally undermine their own debt relief efforts by not fully understanding their credit card agreement or how their credit card usage can affect their credit report. Unfortunately, it doesn't seem to be common knowledge just how credit cards can affect a person's credit score.

First, with all of the confusing information contained in a credit card agreement, people can misunderstand the terms and inadvertently end up in trouble. For instance, many people receive credit cards that offer a certain period of time without interest. However, if people fail to pay attention, they may not notice what the real interest rate will be after the introductory period or that if a principal payment is missed, a "default interest rate" could kick in. Not being able to afford payments with high interest rates could cause adverse reporting to the credit bureaus.

On the other side of the coin, people become so relieved and happy when they finally pay off a credit card that they close the account. This may feel like a victory, but it could actually adversely affect the consumer's credit score. The more available credit a person has, the less impact any purchase will have on the available percentage of credit.

Knowing how to properly deal with credit cards can make them work for the consumer, instead of the consumer working to pay them off. However, even with the best of intentions, Illinois consumers can still get into trouble when it comes to credit cards. In that case, a viable debt relief option could be to file bankruptcy. Consumers can obtain a fresh start financially without the burdens of prior debt.

Source: Today, 10 costly credit card mistakes, No author, Aug. 20, 2013

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