|How Can I Establish Or
Re-Build My Credit?If you do not have a well established credit history, you should begin to build one. The trick is to start small: try applying for credit with a local business, such as a department store or a local bank or credit union. These local merchants may have lower credit standards than larger lenders.
| What Is a Credit Report?
Before you apply for credit,
make sure the credit grantor reports credit history information to
one of the major U.S. credit bureaus so you can build your
history. Companies like Credit.com will help you figure out the best solution.
Other options if you are having difficulty opening a credit
account include asking a friend or family member to cosign your
loan or credit card application or obtaining a secured card, which
is guaranteed by a deposit you make with the card issuer.
Actively Monitor and Manage Your Credit
While the most obvious thing you
can do to build a solid credit history is to pay your bills on
time, you can also take steps to protect your credit standing and
make sure your credit report is accurate when you apply for
Many credit reports contain
inaccuracies, usually caused by innocent errors but occasionally
by fraud (such as identity fraud, in which a thief uses someone
else’s name to open credit accounts). The Fair Credit Reporting
Act ensures your right to dispute such inaccuracies in your credit
report without charge.
To effectively use this right, you
need to be aware of what information appears on your credit
report. One easy and inexpensive way to do this is by ordering a
copy of your credit score online from freescore360.com.
important, so you can get any errors corrected as they surface.
You can also plan a credit strategy much like you would a budget
to improve your credit worthiness. Taking steps like applying for
a major credit card if you only have local credit, closing old
unused credit accounts, and keeping tabs on the number of
inquiries in your report can improve your credit status.
Skip the “Credit Repair” Clinics
Although some consumers pay credit clinics hundreds or even
thousands of dollars to “fix” their credit reports, only
time can improve bad credit. The Federal Trade Commission has
investigated and reported at length on these often-fraudulent
“clinics.” And some credit repair plans actually
encourage you to commit fraud yourself by attempting to create a
second credit identity.
The key fact: There is nothing a credit repair clinic can legally
do to fix a credit report that you can’t do yourself for free.
Consumer credit reports contain easy-to-follow instructions for
disputing inaccurate information at no charge. Inaccurate
information will be changed or deleted. Accurate information that
shows negative payment habits will usually remain on a credit
report for seven years, with bankruptcies remaining up to 10
years. Federal law mandates this.