Tips to Help Build and Maintain Good Credit

Having good credit and using it wisely can make life go easier. Fortunately, there are positive steps you can take that will help make this possible. Here are three important facts to know as you build your good credit:

1. You Can CORRECT Your Credit Report when it is in Error
Your credit report is the summary of your financial reliability–your history of paying debts and other bills. There are three major credit bureaus–Equifax, Experian and TransUnion. Federal law requires these credit bureaus to investigate any complaint you bring to them in writing (usually within 30 days), send you a prompt response and correct any errors. You can learn more about amending and correcting your credit report by visiting the FTC’s website.

2. You Can Take Steps to IMPROVE Your Credit Score
Your credit score is a number lenders use to help evaluate your credit-worthiness. Many lenders use a system called the FICO Score. As a rule, a good score will mean better chances of getting credit at an attractive rate, so taking steps to improve your score can be well worth the effort. Here are some steps to take:

* Pay bills on time.
* Keep credit card balances low.
* Keep debt to less than 30% of your available credit.
* Consider closing unused or forgotten accounts.
* Diversify your credit (e.g., not just many cards, but cards plus installment credit).
* Pay off debt rather than transferring it between cards or accounts.

3. Monitoring Your Credit is FREE
You can get a free copy of your credit report every year from each of the three national credit reporting agencies. That means you can monitor your credit year-round, ordering a report from each of the three once every four months. There is only one online source authorized to give you your report for free: http://www.annualcreditreport.com/. Note: You may be offered additional products or service while on the authorized website, but you are not required to make a purchase to receive your free annual credit report.

A little prevention can go a long way–especially when it comes to your credit and finances. Make it a point to review your finances regularly, and watch for these signs of over-extended credit:

* Paying only the minimum payment month after month
* Being out of cash constantly
* Being late on important payments such as mortgage
* Taking longer and longer to pay off balances
* Borrowing from one lender to pay another