June 2011 Newsletter - How to Build, Maintain, and Repair your Credit
Posted By Price Law Group
Protecting Your Data
Building and maintaining good credit is critical to planning and managing your finances. The higher your credit score, the lower your interest rate on credit cards, mortgages and auto loans.
In fact, your loan might be denied if you have a checkered credit history or low FICO score. Your first step should be to secure a copy of your credit report to see where you stand. You are entitled to one free credit report per year from Equifax, Experian and TransUnion, and you can get it easily by going to www.annualcreditreport.com or calling 1-877-322-8228.
Once you get your report, check it for accuracy: you will be surprised how often mistakes show up. Verify that each creditor listed is actually one you either use or have used in the past, and dispute any errors - including old or outdated addresses.
Tips to building and maintaining good credit
Tips on protecting your credit
- Open a checking or savings account. Having a financial history will help you secure a loan.
- Pay your bills on time; take advantage of auto-pay to avoid late-fees.
- Keep balances as low as possible on "revolving credit" (i.e., credit cards).
- When possible, pay off debt instead of transferring it to low interest rate cards.
- Don't open lines of credit you don't need.
- Don't close credit cards you've held for a long period of time. The length of your credit history plays a factor in the credit score you receive.
- Protecting your credit from identity theft is another pro-active way of maintaining good credit; if your identity is stolen and fraudulent charges appear, it will take some time to straighten it all out.
Tips if you are a victim of identity theft and fraud
- Guard your mail from theft by shredding it before discarding it - especially mail containing personal information, including charge receipts, credit offers and applications, insurance forms, doctor's statements, discarded bank checks and statements, and expired credit cards.
- Be protective of your personal information.
- Be cautious when giving out your credit card number, address, or other personal information. When possible, only share this information with reputable organizations.
- Never carry your Social Security card. Leave it in a secure place at home or in a safe deposit box if you have one.
- Use secure online purchases (https://) whenever possible, and look for graphic images of a lock and key at the bottom corner of your browser or the words Secure Sockets Layer (SSL).
- Avoid using your card as identification. Thieves can use this information to assume your identity and open bank accounts, make purchases - even get a job or apartment using your identity. Only use your credit card at recognized and reputable merchants.
- If you suspect fraud, contact the bank that issued your card and have them put a "credit freeze" on your account. A credit freeze will flag your account and make it difficult for would-be-thieves to open a new line of credit under your name.
- If you suspect fraud, the first thing to do is place a Fraud Alert on your credit file. This alert will stay in place for 90 days and will require creditors to verify your identity before issuing credit in your name.
- If you have already been a victim of fraud, fill out an Identity Complaint Form with the FTC and have them place an extended fraud alert on your credit file which requires all creditors to actually speak with you before issuing credit. The extended fraud alert stays on your file for 7 years.
Repairing your credit will take time. It's similar to building your credit from scratch - but more challenging since the blemishes from the past will be on your file for a while.
Tips on improving or repairing your credit
- Get current on all your accounts. If you are behind, creditors will send your accounts to collectors and this will negatively impact your credit file.
- Pay your bills on time. The length of time you've paid your bills timely impacts your credit score.
- If you fall behind on payments, contact the creditors or see a credit counselor and let them know your situation. This will give you a chance to work something out with the creditors - possibly delaying reports of delinquencies to the credit agencies.
- Get your credit report a few times a year to monitor your progress. Although it takes time to raise those scores, watching them rise should serve as motivation to reinforce these new habits.
For more information call us at 866-210-1722 or fill out the form below.