Tuesday, August 02, 2005
The Importance of Good Credit
I took a few minutes to pull my personal credit report yesterday. There are three national credit reporting agencies, and federal law allows people to pull one credit report from each company every year without charge. It is wise to request your credit report from each agency every year, but do each request four months apart. This gives you the opportunity to get a free credit report every four months. If something shows up that is out of place, get it dealt with through the credit reporting agency. There are federal regulations that impact how quickly they must respond.
What happens if your credit is already horrible? Let's face it, the past is the past. No one has figured out how to go back in time to change things, but the past is not the future. The best way to take care of credit issues is to pay off your debts. You may have to do this slowly, but make sure you are doing it. Many experts recommend that you pay off one credit card at a time, while paying the minimum balance on the rest. Some say to pay off the highest balance card first to save on interest. Others say to pay off the lowest balance first for the psychological value of seeing a debt disappear. Either way, start paying them off. Next, make sure you don't accumulate any additional debt. Paying off one debt just to gain another doesn't help you at all. Over time, lenders will see that you are doing the hard work of dealing with your credit issues. Your credit scores will also start to rise.
Remember, credit issues are not easy to deal with. It requires work. Stick with it. If you need help, get it. There are a number of places where you can get help. The Rockford Area Affordable Housing Coalition is one of those places. If you need more help than we can provide, we will be happy to refer you to agencies that handle more significant credit issues. We will not sell you a product, and our counseling sessions are free. Give us a call!
What happens if your credit is already horrible? Let's face it, the past is the past. No one has figured out how to go back in time to change things, but the past is not the future. The best way to take care of credit issues is to pay off your debts. You may have to do this slowly, but make sure you are doing it. Many experts recommend that you pay off one credit card at a time, while paying the minimum balance on the rest. Some say to pay off the highest balance card first to save on interest. Others say to pay off the lowest balance first for the psychological value of seeing a debt disappear. Either way, start paying them off. Next, make sure you don't accumulate any additional debt. Paying off one debt just to gain another doesn't help you at all. Over time, lenders will see that you are doing the hard work of dealing with your credit issues. Your credit scores will also start to rise.
Remember, credit issues are not easy to deal with. It requires work. Stick with it. If you need help, get it. There are a number of places where you can get help. The Rockford Area Affordable Housing Coalition is one of those places. If you need more help than we can provide, we will be happy to refer you to agencies that handle more significant credit issues. We will not sell you a product, and our counseling sessions are free. Give us a call!
