Your Finances, Your Future - Maintaining Good Credit

Having good credit means you have demonstrated that you can be trusted to pay your bills on time and repay your loans. Bad credit indicates you have a history of late or delinquent payments or have overextended yourself by borrowing too much money. A bad credit history can stick with you for seven years or more. It can make it difficult to get a car loan, a credit card, an apartment or, sometimes, even a job. Learn how to maintain good credit before there’s a problem. 

TIPS:

• Pay what you owe. Always pay at least the total minimum due on credit cards and other accounts. If that is too difficult, design a budget and stick to it. Contact a credit counselor if you need assistance in developing a realistic budget that works for you;
• Pay on time. Your payment should be received by the creditor on or before the due date printed on your statement to keep your account in good standing. Set up automatic payments from your bank account to help you pay on time, but be sure you have enough money in your account to avoid overdraft fees;
• Do not exceed your credit limit. Strive to keep your balance lower than your credit limit and maintain a cushion in case of emergency. Check out more tips for building a better credit rating. 

TOOLS:

• Get copies of your credit report. Your credit record or report contains information about your income, debts and credit payment history. It also shows whether you have been sued, arrested or have filed for bankruptcy. These reports are maintained and sold by consumer reporting agencies. Copies can be ordered online at www.annualcreditreport.com. You can also call 877-322-8228;
• Understand what a creditor looks for on a credit report. Creditors will evaluate your risks by taking into account everything from your bill-paying history to how many accounts you have. Learn more about credit reports;
• Learn how to improve your credit. Even if you’ve made mistakes in the past, there are ways to improve your credit ratings;
• Protecting your credit. Carrying only the credit cards you need is one way to reduce the chances of a stolen wallet resulting in identify theft. But there are other things you can do to protect your credit. Keep copies of credit card companies’ names and numbers along with your account number in a safe place so you can quickly report stolen or lost cards. Find more tips for protecting your credit.
  

TRAPS:

• Paying for copies of your credit report. You are entitled to a free copy of each of your reports annually. Watch out for sites and services that charge for it, or that bundle the service of supplying a report with ongoing credit monitoring for a fee;
• Shop around and read the fine print. It is important to compare offers when applying for credit cards. Fees, charges, interest rates and benefits can vary widely among credit card issuers. And, in some cases, credit cards might seem like great deals until you read the fine print and disclosures;
• Don’t fall for a credit repair scam. Be wary of advertisements promising to remove bankruptcies and repair credit with no problem. Consumer protection experts warn that no legitimate credit repair agency would ever make those claims. Repairing bad credit takes time, patience and work. Learn more about avoiding credit repair scam artists.

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