If you do not have a well-established credit history, you should begin to build
one.
Start small: try applying for credit with a local business, such
as a department store or a local bank or credit union. local merchants may
have lower credit standards than larger lenders. Before you apply for credit,
ask if the credit grantor reports credit history information to one of the
major credit bureaus so you can build your history.
Other options if you are having difficulty opening a credit account include
asking a friend or family member to cosign your loan or credit card application
or obtaining a secured card, which is guaranteed by a deposit you make with the
card issuer.
Actively Monitor and Manage Your Credit
Obviously one thing you can do to build a solid credit history is to
pay your bills on time, also take steps to protect your credit standing
and make sure your credit report is accurate when you apply for credit.
Many credit reports contain inaccuracies, usually caused by innocent errors but
occasionally by fraud (such as identity fraud, in which a thief uses someone
else's name to open credit accounts). The Fair Credit Reporting Act ensures your
right to dispute such inaccuracies in your credit report without charge. Disputing
your credit report
To effectively use this right, you need to check your credit report on a regular
basis. The CreditCheck®
Monitoring Service is especially designed to help you do this.
You can also plan a credit strategy much like you would a budget to improve your
credit worthiness. Taking steps like applying for a major credit card if you
only have local credit, closing old unused credit accounts, and keeping tabs on
the number of inquiries in your report can improve your credit status.
Skip the "Credit Repair" Clinics
Although some consumers pay credit clinics hundreds or even thousands of dollars
to "fix" their credit reports, only time can improve bad credit. The
Federal Trade Commission has investigated and reported at length on these
often-fraudulent "clinics." And some credit repair plans actually
encourage you to commit fraud yourself by attempting to create a second credit
identity.
The key fact: There is nothing a credit repair clinic can legally do to fix a
credit report that you can't do yourself for free.
Consumer credit reports contain easy-to-follow instructions for disputing
inaccurate information at no charge. Inaccurate information will be changed or
deleted. Accurate information that shows negative payment habits will usually
remain on a credit report for seven years, with bankruptcies remaining up to 10
years. Federal law mandates this.