CREDIT EDUCATION

Establishing And Rebuilding Your Credit

Start small: apply for credit with a local business, such as a department store, local bank or credit union. These merchants may relax their credit standards for people in the neighborhood. Make sure the credit grantor reports credit information to one of the major U.S. credit bureaus. You'll be building good credit with every bill you pay.

If you are still having difficulty opening a credit account, you may want to ask a friend or family member to cosign your loan or credit card application. Warning: if you do not pay every bill on time, you run the risk of damaging the cosigner's credit rating.

Many banks offer a secured card, which is guaranteed by a deposit you make with the card issuer. Your credit limit will be equal to the amount on deposit.

You can also plan a credit strategy much like you would a budget to improve your credit worthiness. Taking steps like applying for a major credit card if you only have local credit, closing old unused credit accounts, and keeping tabs on the number of inquiries in your report can improve your credit status.

Monitoring and Managing Your Credit

Pay your bills on time! It seems obvious, paying your bills on time is the best way to build a solid credit history.

Review your credit history. Many credit reports contain inaccuracies, usually caused by innocent errors. The Fair Credit Reporting Act ensures your right to dispute such inaccuracies in your credit report without charge.