Establishing Your Credit

Don't have credit, or would like to improve your credit? Building good credit doesn't have to be difficult, but it does require time and patience. Follow these tips and you're on your way:

• Pay your bills on time.

Credit scores emphasize your most recent payment record. Paying on time raises your credit score. If you've been late, start paying on time!

• Pay at least the minimum amount required.

You can always pay more - and it's a good idea if you can afford to. But you should never pay less than the minimum.

• Keep your credit card balances low.

Don't "max out" your credit cards - that can lower your credit score.

• Don't apply for too many loans or new accounts.

Applying for a lot of credit in a short period of time may concern lenders that you won't manage your debt well. Only apply for credit when you need it.

• Keep your debt-to-income ratio at 20%.

Generally, you should not have debt that's more than 20% of your net monthly income.

• Establish credit if you don't have any.

Open a free or low-cost checking or savings account and make regular deposits. Only write checks when you have money to pay for things. And apply for one or two credit cards, use them carefully, and pay them off each month.

Protecting Your Credit

Two of the most important things you can do to maintain a good credit history are protect your credit rating and protect your privacy.

How can you protect your credit rating?

You need to make careful decisions about how you use credit.

• Separate your wants from your needs. Having credit can make it easy for you to spend above your means, so you need to set good spending habits.

• Compare your income to your expenses and set priorities, goals, and limits. Create a budget [PDF 73K] and stick to it!

• Pay yourself first; put something in savings every month.

• Pay your bills, especially your mortgage, on time. Remember, on time means putting your payment in the mail 3 to 5 days before it is due.

• Get in a routine. Schedule time each month for paying your bills. Use your computer to set up online payments or automatic payments for recurring bills.

• Limit your number of credit cards and try to pay the balances in full every month. It is easy to treat credit cards like they are lay-away plans. Don't do it! It is an expensive way to pay for things.

• Get credit counseling if you need it.

How can you protect your privacy?

Identity theft and credit fraud can damage your credit history.

• Ask "why" when you're asked for personal information. It's your right to know why it's needed, how it will be used, and if you would like to provide personal information.

• Don't use common passwords, such as your mother's maiden name. This information is not difficult to find and can be used by an identity thief.

• Don't give out your Social Security or tax ID, PIN, bank account, driver's license, and credit card numbers unless you're absolutely sure how they'll be used. Most companies will allow you to create a password or phrase instead of providing your Social Security number.

• Be wary of emails from your bank or other organization you do business with asking for you to verify your password. Most banks do not send these types of emails and it is likely the email is a fraud. Do forward the email to the bank or organization in question so they can research the possible fraud.

• Sign your credit cards and debit cards immediately. If you lose them or they're stolen, anyone can sign and spend freely. In addition to your signature, add "Please Ask For ID" so your photo and signature can be verified.

• Report lost or stolen cards immediately.

• Take care when throwing away old bills or papers with private information. Shredding is your best option. Credit card offers and other financial offers should be thrown away with care, as well.

Restoring, repairing or fixing your credit report

Restoring Your Credit

If you would like to improve your credit score, don't worry. No credit score lasts forever - it changes over time, so you can improve it over time.

Every time you apply for a loan or credit card, use credit, or make or miss a payment, you build another entry in your credit report. You also raise or lower your credit score.

Here are ways you can improve your credit score over time:

• Stop spending money you don't have.

If you have a budget, stick to it. If you don't have a budget, make one.

• Make the minimum payments, on time.

You can begin to improve your credit rating right away by making at least the minimum payment, on time.

• Pay off your accounts.

If you have several accounts with small balances, try to pay them off. If you have accounts that went to collection, pay them off as soon as possible!

• Limit your credit.

It may be tempting to open a new account to pay off other accounts, but it is a dangerous trap that can cost you money and actually hurt your credit rather than help.

• Use bankruptcy as a last resort.

Filing for bankruptcy can keep you from getting a loan for a long time, raise your interest rates, and stay on your credit record for 7 to 10 years.

• Get help from a credit counselor. Free and low-cost help is available.

Fix errors on your credit report.

Sometimes, credit reporting agencies make mistakes that can damage your credit record, so it is important to check your credit report at least annually. If you see something wrong on your credit report, fix it immediately.

Chafin Realty Inc.
5230 Bellewood Ct. , Ste# A • Buford, GA 30518
Phone: (770)882-3822 • Fax: (678)714-1021

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