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Starting up your Credit
It may have hit you when you met with a lender. Or maybe in the middle of the night, while trying to pay bills. Or perhaps you realized it when you reviewed your latest credit report:
How did my credit get this bad?
Regardless of whether you found your credit affected overnight or watched its slow decline, you can start practicing better credit management immediately - by acknowledging the situation, taking control of it, and not letting it happen again. Whether you have had good credit in the past that has recently taken a turn for the worse, have had a history of poor credit, or found yourself a victim of Identity Theft, it is not too late to take corrective measures to change your credit situation. Here are some suggestions you can think about:
- Actively monitor your credit. Your credit report may contain inaccuracies, usually caused by innocent errors but occasionally by fraud (such as Identity Theft, when 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. One easy way to keep on top of your credit is by reviewing your credit report on a regular basis. Now you can get a free credit report and credit score when you sign up for a free 30-day credit monitoring trial of Experian Credit Manager PLUS.
- Apply for a secured card. A secured card is a credit card backed by money that you deposit into a bank account that is linked to the issuing credit card company. That account serves as security for the card. Before opening a secured credit card, you may want to ask if the account will be reported to a national credit reporting company. Having the account will not impact your credit unless it is reported.
- Start small with local merchants or credit union credit cards. If you are having trouble getting a major credit card, consider looking into something smaller, such as a department store card. They may have more lenient credit standards than larger lenders, and more willing to take the risk. As with secured cards, before you apply for credit, you may want to ask if the credit grantor reports credit information to one or more of the national credit reporting companies so your positive credit behavior will be recorded.
- Find a cosigner. A cosigner, also known as a co-borrower or co-applicant, is someone who will share equal responsibility with you for repaying the debt. A cosigner pledges in writing as part of a credit contract to repay the debt if you fail to do so. Keep in mind that any bad credit behavior on the cosigned account will reflect equally on your credit report and the cosigner’s.
- Skip the "credit repair" clinics. They cannot do any more for your credit legally than you can do for yourself, and they can't provide you with a “clean” credit report. How do you “repair” your own credit? Consumer credit reports contain easy-to-follow instructions for disputing inaccurate information at no charge. Inaccurate information will be changed or deleted. Accurate negative information can remain on a credit report for seven years for some items, up to ten years for bankruptcies, and up to fifteen years for unpaid tax liens. Only time can remove negative information if it is accurate.
After you have spent some time practicing responsible credit behavior, you may begin seeing an impact on your credit report. With responsibility, patience, and timely repayments, you will likely be able to make a positive effect on your credit report that creditors may look upon favorably when making decisions about your ability to handle even more credit. Check your credit report regularly so you can be sure your good credit habits are being properly recorded. Start here – get your free credit report and credit score today with your free 30-day trial to Experian Credit Manager PLUS!
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