IMPROVING YOUR CREDIT
4 Steps to Establishing Good Credit
by: James H. Dimmitt
As a consumer youve learned the importance of establishing
a good credit rating with your lenders. Whether you are
shopping for a new home or auto, or searching for the
best deals on insurance, your credit worthiness will be
judged by your credit rating or credit score.
A bad credit history or bad credit habits will place black
marks on your credit profile. These include things
such as late payments, having an account assigned to a
collection agency, and of course bankruptcy.
Establishing good credit habits and therefore a good credit
rating will improve your credit worthiness. This will
be reflected in potential lenders offering you substantially
lower interest rates and better deals on credit offers.
Here are 4 tips to help you create a shining credit
1) Pay Your Bills On Time
Lenders only have your past payment history on which to
decide the type of credit risk you present to them. How
you pay off your debts now indicates to them how you will
pay off future debts.
2) Dont Carry Too Many or Too Few Credit Cards
How much is too much ? How little is too little ? Many
credit experts and financial planners suggest two to four
credit cards is just the right mix.
3) Pay At Least The Minimum Due
Always pay at least the minimum due payment, but never
less. And remember, just paying the minimum payment means
it will take you years and years to pay off that credit
Example: Paying off a $2,000 credit payment at 18% APR
with a minimum monthly payment of 2% ($40 dollars or less)
will take you 30 years to pay off the amount plus interest.
4) Review Your Credit Report Regularly
Monitor your credit report from all three major credit
bureaus - Experian, TransUnion, and Equifax - on a regular
basis. Check your credit profile at least annually. Review
it carefully and make sure that any past mistakes or disputes
have been corrected.
Also, if you notice an account listed that you know that
you have not personally opened, contact that creditor
and the credit bureaus immediately. This could be a sign
that youve had your identity stolen. Request to
have a fraud alert placed on your profile and account
to protect yourself and your credit. Identity theft is
the fastest growing consumer crime in America, with an
estimated 1 million people victimized each year.
Establish good credit habits early in life and reap the
benefits that your good credit rating will provide you
for the rest of your financial future.
About The Author
© 2003, Your Free Credit Report Now
Author: James H. Dimmitt.
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