11/06/2006

Build Credit the Right Way

by Karen Willis

Bad credit can sneak up on you like a lioness in the Sahara. While an encounter with the latter produces a more devastating outcome, a substandard credit score will inherently make your life more difficult. But fear not; there are several easy ways to improve your credit score and a bevy of credible organizations out there to help. This article will help teach you ways to immediately improve your credit score and maintain your newfound habits.

Let's get the ‘Don'ts' out of the way first. Building credit is not always easy, and therefore it's a good idea to shy away from easy fixes. Even the Better Business Bureau reports no one can legally remove accurate and timely negative information from your credit report. So don't try it. Be cautious too of unsolicited e-mails you receive offering to fix your credit.

Negative information on your credit report can remain there for up to 7 years (10 years for bankruptcy). It's important to check your credit reports, which can be obtained for free from the three credit bureaus, Equifax, Experion, and Transunion. It's free as well to contact the bureaus and dispute any incorrect information that appears on your report.

If you do realize your credit score dips below the recommended 720, there are ways to immediately improve it. First and foremost, make you payments on time. Next remember to make the minimum payment. Late payments, and payments that do not meet the minimum amount due reflect poorly when creditors and potential lenders view your credit history.

In the event you pay off the balanced owed on a credit card, don't close it! While closing the account may bring about psychological closure, creditors and lenders won't be able to see what a good job you did making payments on time and keeping a low balance if the account is closed. It's important to have a credit history, especially if it's a quality one.

Several for profit and not-for profit organizations exist to help people manage their debt and rebuild credit. Find your local Consumer Credit Counseling Service (CCCS) who can provide advice about how to build a good credit record. If you've fallen behind on credit payments, or feel overwhelmed by your current financial situation, the CCCS may also be able to make payment plans with your creditors, and oftentimes at no charge. You can locate the closest CCCS office by calling toll-free, 800-388-2227, or go to www.nfcc.org.

Improving your credit score is possible and extremely worthwhile. Not only does it mean more money in your pocket, but it means the money you borrow in the future will be easier to attain, and have lower interest rates. And what a bright future it can be.





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