Why Good Credit Matters

Establishing sources of credit and maintaining a good credit history should always be a part of your financial planning. Typically, you will not have the money yourself to purchase many of the big-ticket items in your life, such as a car, house or college education. Thus, having access to credit is very important if you are to acquire and enjoy most major assets during your lifetime. Although lenders consider a variety of factors in deciding whether to give you credit, most of them rely heavily on your credit history. So, building a good credit history is essential if you want to be able to borrow money. Furthermore, changes in your life, such as divorce, loss of income, relocation, retirement, education for your children, and loss of a spouse, may all trigger a need for you to get credit or review your current credit history.

The following is a list of topics you'll find in this section:

Establishing Your Credit History
If you don't have a credit history, you should begin to build one. If you have a steady income and have lived in the same area for at least a year, try applying for credit with a local business, such as a department store.

How Credit Bureaus Work
Credit reporting agencies, often called credit bureaus, are companies that gather information on credit users and sell that information in the form of credit reports to companies that offer credit, such as banks, finance companies and retailers.

Understanding Your Credit Report
Learn where to get a copy of your credit report, what the report covers and how to cope with a bad credit report.

Dealing With Creditors
If you find that you can't make your payments, contact your creditors at once.

The Cost Of Credit
If you are considering borrowing or opening a credit account, your first step should be to figure out how much it will cost you and whether you can afford it.

Sample Letter To Correct Errors In A Credit Report
Here you'll find a sample letter to send credit agencies to correct errors in your credit report.