Are you worried about a bad credit rating? Are you thinking of applying for a mortgage loan, or another type of loan that requires a good credit rating?
There are a few things you should do above all else.
The very first thing you should do is find out what your credit rating is, and you can do so, free of charge, once every year, by requesting your credit report.
There are several sites on the Internet where you can receive your credit report. Many of these places require you to become a member. Additionally they will charge you a monthly fee.
One site, Annual Credit Report will allow you to receive your credit report from all three credit bureaus, Experian, TransUnion, and Equifax, free of charge, once every 12 months.
Credit bureaus divide all credit reports into three sections; one contains personal identification information, one for your credit history, and the third section contains any collections, public records, and inquiries.
The first section identifies you, your address, your employer, and previous address and employers.
The second section contains all of your credit information. This includes credit card information, mortgage payments, and loan payments.
The third section will contain any information about you that creditors sent to a collection agency for payment, and will include any public records that list possible court cases due to lack of payment for services rendered.
Naturally, if there is something, or several things, listed in the third section, these could hinder your chances of securing a loan.
However, if for some reason, you previously paid off these collections or settled the items listed under public records, there are ways to have these items removed from your credit report.
At the Credit InfoCenter Web Site, there is plenty of useful information on how to fix errors on your credit report.
Late monthly payments may appear on your credit report as well, so you should always try to pay off at least the minimum amount each credit card company requires, to keep your credit in good standing.
If you several credit cards, you should start paying off the ones with the least dollar amount, and when you finally pay them off, you should consider destroying them and only going with one or two credit cards.
If you have outstanding debts from credit card usage, you may be able to work out a monthly payment with each company that works for you, and satisfies them enough to not report late payments to the credit bureaus.
Another important thing to keep in mind, is that having no credit is something lenders frown upon as well.
If you plan to make a large purchase in the new future, a house or a car, and you have no credit cards, you should think about going with one credit card company, and only using that card for purchases you make every month, such as grocery shopping or certain utility companies.
There are mortgage companies and other businesses that deal with lending people money, that are willing to work with you on securing a loan for your first home, or other large first-time purchase. The best thing to do is to shop around and speak to some of these companies.
Overall, the best thing you can do to avoid bad credit is make all of your payments on time. If that is impossible, most people are reasonable, if you take the time to reach out to them and explain extenuating circumstances.
If you want to avoid bad credit, never simply let any outstanding payment go, thinking that they will forget about it. They will not in most cases, and you will wind up with a bad credit rating.