Ten Steps To Building A Good Credit History

Are you thinking of buying a house? Do you want to buy a new car to replace that old wreck? Trying to get insurance on you home, auto, or life? In each of these situations, what's on your credit report will determine if you can get a loan or insurance and what rates you'll have to pay.

If you're trying to build or repair your credit history, you have a daunting but not impossible task in front of you. Lots of people have been where you are and today they have good credit. With time, discipline, hard work, and by taking the proper steps, you'll be able to build a good credit history too.

To build or rebuild your credit history you need to take certain steps:

Develop a budget and live by it. Whether your building credit for the first time or rebuilding credit, you need to know how much money you have coming in each month and how you're spending it.

Start by listing your income from all sources. Next list all fixed expenses (rent, mortgage, car payments?). Finally list all of your variable expenses (entertainment, recreation, clothing?) no matter how small they are. Writing down and tracking your expenses will help you to understand your spending patterns and you'll be able to see where you can save money by making lifestyle changes.

Open a checking account and use it responsibly. Lenders want to know that you have a relationship with a financial institution and that you have a checking account available to pay your bills. Don't overdraw your bank account; in addition to possible damaging your credit record, you'll be charged fees.

Pay your current bills on-time and pay them in full. Paying your bill on-time puts positive information on your credit record. Late payments or missed payments count against you.

Review your credit report annually. Contact Equifax, Experian, and Trans Union to get copies of your credit report. You should get a copy of your credit report from all three reporting agencies because some creditors don't report to all three agencies. If you're a member of a credit union, check to see if your credit union offers discounted credit report ordering for its members.

Fix any errors on your credit report. If you find errors on your credit report, contact the credit reporting agency and the creditor (in writing) to get the errors fixed. Check your credit report to make sure that negative information like late payments, delinquencies, liens, and judgments against you have been removed after 7 years; bankruptcies should be removed after ten years.

For more information on how to dispute errors on your credit report, visit the Federal Trade Commission website at: http://www.ftc.gov/bcp/conline/pubs/credit/crdtdis.htm.

Apply for a credit card. If you're rebuilding your credit history, consider applying for a secured credit card. To get a secured credit card, you'll need to deposit funds with the credit card issuer and your credit limit is usually equal to the amount you deposit. A secured card can be used the same way as an unsecured card and your timely payments will help to improve your credit history.

Apply for a department store or gasoline card. These cards are usually easier to get than major credit cards and they come with smaller credit limits.

Establish an account at a credit union and take a loan out on it. This is a secured loan. You'll have to pay interest on the loan, but if your payments are reported to the credit bureaus, the small interest fees will be worth the positive information that is added to your credit record.

Don't max out your credit cards. Maxing out your credit cards can hurt your credit score. Try not to use more than 30% of the credit you have available to you. Part of your credit score measures the amount of credit that your have available to you and how much you're using. The more credit you're using, the more negative impact on your credit score.

If you get into trouble with your credit, get help. Don't wait until creditors send your accounts to debt collectors. If you can't make a payment contact the creditor and make arrangements to make the payment. If you feel that you're over your head in debt get help from a debt counselor.

You can contact Equifax, Experian, and Trans Union at:

Equifax: www.equifax.com/

Experian: www.experian.com/

Trans Union: www.tuc.com/

About The Author

Drahcir Semaj is a freelance writer. You can contact him at drahcir@drahcirsemaj.com. Or visit his website at http://www.drahcirsemaj.com

---

Credit Card Expenses Are Killing Your Budget!

Do you know the costs associated with your credit card?... Read More

Borrowing on a Credit Card

One of the easiest ways to borrow money of a... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Dont Fall For A Scheme When Trying To Rebuild Your Credit History

For people with a spotty credit history or bad credit,... Read More

Credit Reporting: How Does It Work?

In order to determine a consumer's credit worthiness, creditors and... Read More

Finding the Right Credit Card

There are so many credit cards out there to choose... Read More

Which Business Credit Cards with Reward are the Best?

Thinking of applying for a credit card with a reward... Read More

The Credit Card Surprise That You Need to Look Out For

Companies that issue credit cards want to make a profit.... Read More

Low Interest Credit Cards Have Many Advantages

When credit cards are used wisely they can be very... Read More

Understanding Credit Report Score

Understanding credit report scores is important when you see your... Read More

Start Building Credit Fast!

There are a couple of reasons for this. You can... Read More

Various Types of Credit Cards - Part 2

Several different types of credit cards offer several different options,... Read More

Top 7 Factors to Consider While Reviewing Credit Card Offers

Credit cards have migrated from being hip or convenience product... Read More

Useful Tips On Avoiding Credit and Charge Card Fraud

Credit and charge card fraud costs cardholders and issuers hundreds... Read More

Free Credit Reports: From The 3 Major Credit Bureaus!

Get your credit report online for FREE. Many financial advisors... Read More

Teaching Students To Keep Out Of Credit Card Debt - The Parents Role

Parents have the full responsibility for their children and their... Read More

Practical Suggestions for Protecting Yourself From Identity Theft

It's no surprise that thousands of Americans are victimized by... Read More

Beware the Shopping Mall Monster

Like me, you've probably been offered a fair old number... Read More

Saving Money with Credit Cards

Having a credit card is a wonderful convenience for those... Read More

Common Credit Score Myths

A lot of credit score myths about fico score ratings... Read More

Why Does Your Credit Card Rate Keep Going Up?

Have your read your credit card contract through completely? Do... Read More

Credit Repair Myths and Facts

There are no secrets to repairing your credit. Many shady... Read More

SuperCharged Secret 1 of 5 - Credit Card Utopia

I AM THE CONSUMER. AND I HAVE LOW-RATE SUPER-POWERS!Note: The... Read More

What You Should Know About Credit Counseling

Credit counseling is a free service that many people with... Read More