How to establish or re-establish good credit

If you do not have a well-established good credit history, here's some tips on how to begin building or re-building one.

The trick is to start small: try applying for credit with a local business, such as a department store or a local bank or credit union. These local merchants may have lower credit standards than larger lenders. Before you apply for credit, make sure the credit grantor reports credit history information to one of the major U.S. credit bureaus - this will help build your credit history.

Other options, if you are having difficulty opening a credit account, include asking a friend or family member to co-sign 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

While the most obvious thing you can do to build a solid credit history is to pay your bills on time, you can 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.

The most effective way to verify the accuracy of your credit history is with a 3 Bureau Online Credit Report. This allows you to obtain your credit information from all three major credit bureaus in one easy, side-by-side report in seconds! It's simple to scan your reports and make sure possible inaccuracies aren't impacting your credit history so you can put your best foot forward with lenders. Plus, you'll get a Free Credit Score, complete with personalized analysis and tips that can help you improve your credit rating.

Avoid "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." Some credit repair plans actually encourage you to commit fraud yourself by attempting to create a second credit identity. BEWARE!

Crucial Fact regarding "Repair Clinics"

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.

We are in the business of obtaining the best possible loan to meet your needs and goals, we are NOT in the credit repair business. You can remove erroneous information from your credit report by following instructions contained in this section of our website, or seek the help of a true professional, NOT a "Credit repairing agency" - that is the worst thing you can do! Disclaimer: This website section has been prepared for general information purposes only. The information in this section is not legal advice. Legal advice is dependent upon the specific circumstances of each individual situation. Laws may vary from state to state. We are not lawyers. We do not offer legal advice. The issues discussed on this site are the expression of the personal experiences of laypersons. Finally, the information contained in this section of the website is not guaranteed to be up to date. Therefore, the information contained in this section cannot replace the advice of competent legal counsel licensed in your state. Disclaimer of Warranty. The materials, information and forms available in this section of the website are provided without any warranties, express, implied or statutory. Any and all implied warranties of merchantability or fitness for a particular purpose are hereby disclaimed.