Improving Your Credit
If you have a lower credit score than you would like, you CAN do something about it. Regardless of the reasons for your credit woes (misuse of credit, failure to pay bills, illness, unemployment), it's important to take steps to improve and maintain it. It's hard work to rebuild your credit rating, but it can be done, and it's well worth the effort.Depending on how serious your past and present credit problems are, it may take time and patience to achieve good credit, but you don't need an expensive "credit-repair" clinic to do it. They don't have any special tricks up their sleeves; there's nothing they can do for you that you can't do for yourself -- for free. Instead, work with a reputable nonprofit credit counseling organization listed below or use the following tips right now:
Pay bills on time. The most important rule for maintaining good credit is to pay your bills on time. You can begin to improve your credit history immediately by making at least the minimum payments on time. Within a few months it will be obvious that you are managing your credit responsibilities better and a new, stronger credit report will result.
Use credit sparingly. A general rule of thumb is to spend no more than a third of your income on all debt, including mortgages, credit cards and consumer loans. Try to use credit cards only for purchases that have long-term value, such as furniture, medical care, or emergency repairs. DON'T depend on credit cards for everyday frills like dining out or entertainment.
Correct mistakes. Your credit is a reflection of the information in your credit report. If your credit report contains negative information, it will negatively impact your credit regardless of whether or not the information is accurate. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
Pay more than the minimum required. When you pay only the minimum due each month, you end up paying a lot of money in interest charges. For example, If you have a card with an 18.5 percent interest rate, it will take you more than 11 years to pay off a debt of $2,000 if you pay only the minimum balance due each month. You will also pay interest charges of $1,934, almost doubling the cost of your purchase.
Work with a reputable nonprofit credit counseling organization. Reputable nonprofit community-based credit counseling organizations can provide one-on-one assistance to help you improve your credit. Don't confuse expensive credit-repair clinics with legitimate nonprofit credit counseling organizations. Be sure to watch out for organizations that charge big upfront fees, make unrealistic promises, and lack accreditation credentials.
