It is extremely important to know that your credit behavior can have good or bad consequences for your future, and it is therefore your personal responsibility to make sure that you understand all aspects of what constitutes good versus bad credit.
It is extremely important to know that your credit behavior can have good or bad consequences for your future, and it is therefore your personal responsibility to make sure that you understand all aspects of what constitutes good versus bad credit. Additionally, you must take care to monitor your credit. Technology has made it easier for criminals to assume a person’s identity and wreak havoc on your financial future.
The first steps to managing your credit are the following:
• Pay your bills every month (no matter what). If you don’t have a lot of cash, then all you have to do is pay the minimum monthly amount shown on your statement.
• Don’t abuse your credit cards. Keep your balances low. Your chances of obtaining a high credit score in part depends on how much of your available credit you are using.
• Use only two or three credit cards (at the most). Why have eight to 10 cards, when all you need is two? That’s you all you may need for the daily or weekly purchases, or for emergency repairs when cash is not readily available to you.
• When you do have extra cash, pay down your balances. Interest rates on credit cards can be extremely high. With rates that high, you definitely want to minimize your balances.
• To regularly monitor your credit to make sure no one else is using your credit, you must order your credit report from all three major credit reporting agencies:
Equifax
Trans-Union
Experian
• Analyze the information on each report:
• Make sure your name, address, phone number, Social Security number and other pertinent and personal information are accurate.
• Check your balances
• If you have any delinquencies or collections that are more than seven years old, make sure that the reporting agencies remove them. They are required by law to do so.
• If you want to dispute any items on the report you think is inaccurate, then write the reporting agencies immediately. Provide them with the proof. If the reporting agencies cannot prove that you are wrong, then they have to by law remove the negative information pertinent to the disputed account.
• If you do have credit problems and are in need of counseling, then beware of credit repair scams.
• Much of what needs to be done to your credit report if there is wrong information can be done by you. Many credit repair specialists are only performing tasks that you yourself can do on your own.
• Don’t wait until your credit balances or monthly payment gets out of hand before acting. Call your creditors immediately if you think you will have financial troubles. Your creditors will work with you, especially in this economic environment. But the responsibility is yours. If you let your creditors chase you and you don’t call or write back, you leave them with no choice but to proceed with harsher legal action. It is cheaper for the creditors to work out a plan with you.
• In our society, your credit report follows you through life for a long time. This means that your credit behavior can influence whether you are approved for a loan, insurance or employment. Therefore, use credit wisely and monitor it regularly.
______ Copyright 2009 National City Bank. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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