Poor credit can wreak havoc on your life in terms of getting jobs, the rates you’ll pay on loans, or qualifying for credit in the first place. We’ve heard and seen the dangers of credit repair services. There are no “quick fixes,” but with a bit of time, guidance and record-keeping, you can take matters into your own hands and begin building credit. We want to teach you how to build credit on your own in a smart and safe way.
To get started, access copies of your credit reports. Each of the nationwide consumer reporting companies—Equifax, Experian, and TransUnion—is required to provide you with a free copy of your credit report once every 12 months. The three companies share a central website and a toll-free telephone number to order the free annual credit reports the government entitles them to. To order, visit annualcreditreport.com, or call 1.877.322.8228.
Once you have the reports in hand, read over them. Since credit scores are based on a wide range of data mined from these credit reports, in general, strengthening your credit history will also improve your credit scores. Building credit starts with an understanding of these reports.
Credit reports portray an image of you by reporting your financial credit and personal contact information. A lot more than actual credit card information is included—how much total debt you have incurred, the number of credit inquiries that have been made on your credit history, and how long it takes you to repay your debts are also included on a credit report. If you have had any liens or bankruptcies in your credit history, these, too, will also appear on the report.
FICO, the largest and most respected score provider, shares an overview of how their score is calculated:
This information is then compared with similar information from other consumers to determine your credit score. The number can range anywhere from 300 to 850—the higher the number, the better your score. More details on these five categories from FICO.
The task is straightforward and comes down to the basics:
If you want to learn more about how to build credit or how to pay off debt, you can meet with a Clearpoint consumer credit counselor. Call 800.750.2227 (CCCS) to schedule an appointment for a free debt and credit counseling session or get started online.
Fill out a form and start working with one of our counselors.Get Started