Urban myths- We hear them all the time. Some that come to
mind: alligators living in the sewers...mixing the candy
Pop Rocks with soda pop will make you explode...and credit
repair companies can instantly solve credit problems.
Most of the myths are harmless fun; but when it comes to
your credit, you could lose money and break the law if you
don't know the truth.
Some credit repair companies make promises about turning
bad credit into good credit. And while it may sound
enticing, don't be fooled. Truth is, nobody can legally
remove accurate and timely information from your credit
report. You should be skeptical of any company that claims
they can do a quick fix to your credit.
In fact, the Federal Trade Commission (FTC) is continuing
its crack down on credit repair schemes. Eileen Harrington,
Deputy Director of the FTC's Bureau of Consumer Protection,
is part of the project. "There is absolutely no reason to
pay for credit repair," Harrington said. "Despite their
claims, there is nothing that any credit repair firm can do
for you for a fee that you cannot do for yourself at little
or no cost."
So, what can you do if you want to improve your credit?
Here are some suggestions: Identify harmful habits Order
your credit report and look for any problem areas that jump
out at you. If you see that you have a bunch of late
payments, what can you do to make sure you pay on time? Or,
if you notice that you have credit card balances close to
your limit, you should try to pay those balances down
first. And, do you have several hard inquiries on your
report? This could mean you're applying for too many credit
cards.
Set measurable goals-Once you decide you want to tidy up
your credit and know what you have to change, it's a good
idea to set goals. That way, you can track your
improvement. Plus, when you reach a goal, you'll have
reason to celebrate.
One of your goals might be to improve your credit score by
50 points—or get your score above 650. In general, a
score of 650 or higher will help you qualify for better
interest rates on loans. You can see how you're progressing
by checking your score every three months or so.
Be realistic - Let's face it, our dream house and what we
can actually afford are usually two different things. When
you're applying for a mortgage or any big loan, it's
important to be honest with the lender about your current
financial standing. Otherwise, you may take on a mortgage
that's too much to handle, and you could overextend
yourself.
The biggest thing you need to improve your credit health is
the right attitude. If you believe you can do it, then you
will do it. And remember, credit mistakes aren't set in
stone—negative records will expire from your credit
report. With time and a little effort, you can fix those
mistakes.
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TransUnion's TrueCredit.com has helped millions of
consumers manage their own credit health. TrueCredit
provides all the information individuals need to manage
their credit. TrueCredit.com products include online credit
reports, credit and insurance scores, credit monitoring,
debt management tools and identity theft insurance, all
designed to help individuals achieve greater financial
well-being. http://www.truecredit.com/
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