Your credit score (also known as FICO score) is extremely important in that it represents your creditworthiness to various lending institutions.  It’s a measurement to evaluate the potential risk involved in lending you money and the likelihood that you will repay your debt in a timely manner.  Instead of looking through your entire credit history to determine creditworthiness, a credit score summarizes your financial history in numerical form. Credit scores are based on information within an individual's credit report maintained by three major credit bureaus, Experian, Equifax, and TransUnion.  It's a number usually ranging between 300 and 800.

Also, know that your credit score is a fluid number, meaning it changes over time depending upon how you are managing your current debt.  It is extremely important to keep up with your credit reports, so you’ll be aware of any instances that are affecting your credit scores.  The Fair and Accurate Credit Transactions Act (FACT Act) allows you to get one free comprehensive report of all of the information in your credit file from each of the three national credit reporting companies once every 12 months through a Central Source.  You may contact the Central Source by visiting  www.AnnualCreditReport.com.

To dispute information in your credit report or for problems with the Credit Reporting Agencies, you will need to contact the various credit bureaus directly and you must have a copy of your credit report on hand.

www.equifax.com - 800-685-1111
www.experian.com - 888 397 3742
www.transunion.com - 800-916-8800

Establishing Credit

Getting a positive start in the credit world is crucial for present and future investments and transactions.  It is much easier to establish a good foundation than to pay for it later. Here are a few steps to begin establishing your credit:

• Get a credit card.  This is the first step toward building credit. 
• Use your credit card responsibly.  Make sure you are paying off your balance every month, this is very crucial.  It is too easy to get carried away with your spending.  Keep in mind this is just a new method of using the money in your current bank account. 
• Budget your expenses.  Being aware of where your money is being spent can help you control it.  Having a budget will let you spend more on things you need and less on on trivial items.

Remember!

Overdrawing from your bank account and making late payments will have negative effects on your credit history.  Show lenders you can handle the responsiblity of your debts by following the steps above.

Improving Your Credit

Improving your credit takes time and sticking to basic principles.  Basically, you're improving your credit history over time, which then will have a positive effect on your credit score.  You can begin to improve your credit history by taking a close look at your credit reports and use the following tips to chart a plan of action for improvement.

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