| How to Borrow Money, Part 6 |
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One important thing to remember: if you use a consumer-credit-counseling organization, it will be reported to the credit bureaus and noted on your credit record. That fact should not deter you from using a credit counseling service, particularly if your only other alternative is filing for bankruptcy. While you may ultimately have to resort to bankruptcy, give credit counseling a try first. Personal bankruptcy, when all else fails. If you find that neither your own good efforts nor those of a credit counselor can salvage your situation, personal bankruptcy may be your only alternative. Some attorneys make it sound easy, but you should consider it only as a last resort. Bankruptcy is by no means the end of the world, but it will impede your access to credit for at least a few years. Check your credit reports for errors. You are entitled to request and receive a gratis (free) credit report once a year from each of the three credit bureausEquifax, TransUnion, and Experian. You may do so by visiting www.annualcreditrefort.com or by calling (877) 3228228 to request your three reports. Chances are you will have an error on at least one of the credit reports. Review each report carefully and follow the instructions for correcting any erroneous information on the dispute form that accompanies your report. The credit bureaus are required to investigate any items you dispute and correct any erroneous information on your report. Pay your current obligations on time. Chances are that any besmirchments on your credit record are due to falling behind on making payments. While this information can remain on your credit report for many years, credit card companies and other lenders tend to forgive such sins if they happened sporadically in the past and your more recent record shows a nice string of on-time payments. So your most important assignment is to make on-time payments every monthearly payments are even better, even if it's only minimum payments. Take action to enhance your creditworthiness. The objective here is to be able to show the credit grantors that you are making steady progress at managing your financial obligations. Make sure that at least some of the companies that extend you credit report to the credit bureaus. Many may not, including banks and credit unions and gasoline card companies. Be particularly careful about managing the loan balances on those that do report. Keep the outstanding balances as low as possible, ideally under 50 percent of the maximum allowable loan. Eventually, though, you'll want to get into the habit of paying off the entire balance each month. While the credit grantors may not appreciate that habitthe scalawagsthe credit bureaus will. |
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