How to keep good credit

Jet, Dec 9, 2002

Maintaining good credit is a cornerstone for financial stability.

People with good credit have established a good credit history with a proven record of making at least the minimum payments on time--by or before the due date, and staying within their credit limits.

They've also learned to be temperate in all their purchases and resisted the temptation of applying for more loans or credit cards than they can handle. As you continue to manage your money (JET, November, 4), as well as your debt (JET, November 18), don't forget to keep maintaining your good credit.

According to the Federal Citizen Information Center (FCIC), there are several ways you can maintain a good credit history:

* OPEN A CHECKING ACCOUNT, A SAVINGS ACCOUNT, OR BOTH. These do not begin your credit file, but may be checked as evidence that you have money and know how to manage it. Cancelled checks can be used to show you pay utility bills or rent regularly, a sign of reliability.

* APPLY FOR A DEPARTMENT STORE CREDIT CARD. Repaying credit card bills on time is a plus in credit histories.

* GET A SECURED CREDIT CARD. A secured credit card is a bank credit card backed by money you deposit in a bank account. If you don't pay off your credit card bill, the money in your account may be used to cover that debt.

* IF YOU'RE TURNED DOWN FOR CREDIT, FIND OUT WHY. It's important to clear up any credit misunderstandings or mistakes, because a bad record can cloud your credit future. Your credit rating is important, so be sure credit bureau records are complete and accurate.

It bears repeating that if you have been denied credit, employment or insurance because of information on your credit report, you must receive the contact information for the credit bureau that supplied the report. If you contact the bureau within 60 days, you can receive a copy of your report for free. Review your report carefully to make sure there are no errors. It's also a good idea to check your report for errors annually. If there is a mistake on your credit report, contact the credit bureau in writing and explain the situation.

Keeping good credit can be a challenge, but armed with sound financial knowledge, it's a challenge that can be met.