Getting and Keeping Good Credit

What is good credit?
What is bad credit
Maintaining your credit
Protecting your credit
Don't get scammed
Women and credit
What are your rights
Disclosure
Unauthorized charges
How to get a free credit report
Helpful websites

WHAT IS GOOD CREDIT?
Your credit record started if you ever applied for a credit or charge account, a personal loan, insurance or a job. Your credit record reports:

• Your income (preferably steady)
• Residency information (the longer the better)
• Your debts
• Credit payment history
• If you have filed bankruptcy

The information is reported to three major national credit reporting agencies (Equifax, Experian and Trans Union).

Companies you approach for money get the reports from one or all of the credit bureaus. The lender looks at your payment history and the amount of debt you currently hold to evaluate your risk level in lending you more money. The information is printed in a report and usually contains a credit rating (a score used to determine if you are a low, medium or high risk for the company looking to lend you money).

Good credit helps you:

• Borrow money
• Charge important items
• Rent an apartment
• Finance an automobile
• Get a mortgage
• Establish accounts with utility companies
• Secure employment

WHAT IS BAD CREDIT?
Accurate negative information generally can be reported for seven years, but there are exceptions:

• Bankruptcy is reported for 10 years
• Job application for a job paying $75,000. plus has no time limit
• Lawsuit or a judgment against you is reported for seven years or until the statute of limitations runs out, whichever is longer
• US Government insured and guaranteed student loans are reported for seven years after certain guarantor actions

MAINTAINING YOUR CREDIT
It is easy to maintain good credit. All you have to do is pay your bills on time. It is easier when you borrow amounts you can comfortably pay back.

If you are unable to pay your bills because of illness, unemployment or other reasons, contact your creditors and explain the problem. They may work with you to set up a new payment plan to help you until the crisis is over.

If you need help, contact a credit counseling service. There are some that are non-profit or low-cost. They can help arrange payment plans and set budgets.

PROTECTING YOUR CREDIT

Do:

• Sign your cards as soon as they arrive
• Draw a line through blank spaces on the charge slip so the amount can't be changed
• Take your ATM receipts from machines
• Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place
• Keep an eye on your card during the transaction and get it back as quickly as possible
• Void incorrect receipts
• Destroy carbons
• Save receipts to compare with billing statements
• Open bills promptly and reconcile accounts monthly, just as you would your checking account
• Report any questionable charges promptly and in writing to the card issuer
• Notify card companies in advance of a change of address

  Don't:
  

• Lend your card(s) to anyone
• Leave cards or receipts lying around
• Sign a blank receipt
• Write your account number on a postcard or the outside of an envelope
• Give out your account number over the phone unless you are making a call to a company that you know is reputable. If you have questions about a company, check it out with your local consumer protection office or Better Business Bureau

DON'T GET SCAMMED
Companies that say they will erase your bad credit or create a new credit identity, etc. are scams. They end up vanishing with your money.

The warning signs:

• Want you to pay for credit repair services before any service is provided
• Don't tell you your legal rights and what you can do - yourself- for free
• Recommend that you not contact the credit bureau directly
• Suggest you try to invent a "new" credit report by applying for and Employer Identification number to use instead of your social security number
• Advise you to dispute all information on your credit report

Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.

WOMEN AND CREDIT
Married and divorced women have special concerns in building and maintaining a credit history.

• To make sure you will have credit in your own name, ask creditors to report joint credit accounts under your name and Social Security number as well as your husband's
• Update your credit file if your name changes due to marriage or divorce
• If you legally separate or divorce, cancel joint accounts and apply for new ones under your own name. Notify your creditors in writing when you are no longer responsible for your ex-spouse's debts.

WHAT ARE YOUR RIGHTS

Denied credit:

• Ask why. It is possible that your income isn't high enough or you haven't been at your address or job long enough
• If you are denied due to information supplied by a credit bureau, the denying company must give you the name, address and telephone number of the credit bureau that provided the report. If you contact the credit bureau within 60 days, you can get a free copy of your credit report. If you find accurate negative information, only time will restore your credit. If you find incorrect information, the credit bureau can investigate the information at no charge and send you a new copy of the corrected report
• You have the right to add a summary explanation to your credit report if your dispute is not resolved to your satisfaction

Error in Your Bills - Notify the card issuer in writing within 60 days after the first incorrect bill was mailed to you. Include your name, account number, type of error, date of error, amount of error, and the reason why you believe the bill contains an error or why the bill is incorrect. The company has 90 days to investigate after receiving your notice. You do not pay the disputed amount during the investigation.

DISCLOSURE
You can request a list of companies that received your report in the last six months.

UNAUTHORIZED CHARGES
You can be held liable for up to $50.00 per card if an unauthorized charge is made. If you report the card lost or stolen before it is used, the issuer cannot hold you responsible for any unauthorized charges.

HOW TO GET A FREE CREDIT REPORT
You are entitled to receive one free credit file disclosure every 12 months from each of the nationwide consumer credit reporting companies - Equifax, Experian and TransUnion. It is entirely your choice whether you order all three credit file disclosures at the same time or order one now and others later. Ordering all three at the same time allows you to compare them. Remember, however, that you will not be eligible for another free credit file disclosure for 12 months. On the other hand, the advantage of ordering one now and others later (for example, one credit file disclosure every four months) is that you can keep track of any changes or new information that may appear on your credit file disclosure. If you order from only one company today, you can still order from the other two companies at a later date. To order your free credit report, go to: www.annualcreditreport.com

Helpful websites
http://www.creditinfocenter.com/identity/
http://partners.financenter.com/nationalcity/learn/guides/creditreport/crbasics.fcs
http://www.parealtor.org/content/UnderstandingCredit.asp