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by Airman 1st Class Kali Gradishar, 92nd ARW Public Affairs

8/2/2007 - FAIRCHILD AFB - Buying a house, furniture, car or recreational vehicle. Applying for a loan. Getting an apartment. These are sometimes necessary things that can be very difficult for someone with bad credit, but it doesn't have to be a permanent situation.

There are many things one can do to work their way up to what businesses deem an acceptable credit score.

"The key to effective credit history is paying your bills on time," said Della Gooding, Airman and Family Readiness Center financial advisor.

One thing to be aware of, however, is paying bills online. Though it may seem like the internet is instant, it can still take some time for the companies to receive the payment. So, waiting until the last minute to pay bills, whether online or not, can carry unexpected late fees.

"One way to ensure this doesn't happen to you would be to read the fine print on when payments are due and if there is a grace period," said Ms. Gooding. "It's very wise to pay bills on time because paying them late reflects on the credit score."

Once bill payments are in order, it's time to evaluate your credit. The first thing to do is to get a credit report.

"A free credit report is available at www.annualcreditreport.com where three major credit report agencies will provide one report a year," Ms. Gooding stated. "I recommend people who have never done this before start in their birth month to remember more easily to do it."

After receiving the report, it is necessary to look over all of the information to ensure it is correct. If not, there are specific procedures to go through to make sure the information is corrected. This can be a prolonged process, but is worthwhile to make certain your credit report reflects your credit accurately.

The next step is to establish credit. There are many ways to establish credit, such as obtaining a maintainable credit card.

"Be careful and selective of where you apply for credit cards when establishing credit. Even without credit, your credit score will continue to drop if you apply numerous times," Ms. Gooding noted. "It might be best to apply for a credit card through the bank or credit union your direct deposit goes through. This way the financial institution sees there is a consistent pay history."

Although credit cards can boost your credit score, they can also bash it.

"The goal is never to go above 50 percent of the available balance of a credit card," she said.

Keep in mind through the process of establishing and fixing credit is that your credit history is always yours.

"I try to warn that co-signing for other people is very bad. Considering co-signing for someone must be taken very seriously," Ms. Gooding warned. "This can affect your credit for the rest of your life."

Persistently review your credit report, make your payments on time and make wise decisions that will increase your credit score rather than flush it. Work on these things and the next time you apply for a home loan or need to finance a purchase, you are sure to get a thumbs-up.
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