Would you like to own a home some day?  Buy a car?  Rent an apartment?  Have you had difficulties obtaining these things, or others, due to bad credit?  Well, there is hope!  You can repair your credit… yourself!

“Bad Credit?  NO Problem!” offers are available everywhere, but unless you take steps to keep your credit rating on the right path, you run the risk of costing yourself money… the very thing you can least afford!  High interest rates (like with those “Bad Credit?  NO Problem!” offers) cost YOU.

Suppose you wanted to buy a $20,000.00 car and pay it out over 48 months.  With good credit, they may be offering a 6.5% interest rate (sometimes much less!), meaning you’d pay approximately $2700.00 in interest over the life of the loan.  *However*, with bad credit, they may offer you an 11% interest rate (sometimes MUCH higher!), meaning you’d pay approximately $4800.00 in interest over the life of the loan!  That’s a big difference!

For those with bad credit ratings: DO NOT FEEL ALONE:  In 2005, approximately 2 million households filed for bankruptcy, so a lot of us have been in your shoes.  There are many reasons why you may find yourself in this situation – divorce, medical bills, lost job, the “ignorance of youth”, etc. 

For those who may be unfamiliar with the credit process, here’s a quick summary: You apply for a credit account to purchase goods or services.  Based on various factors, the Creditor agrees to open a credit account for you and begins reporting your information to the Credit Reporting Agencies.  In turn, the Credit Reporting Agencies update, store, and share your information with other potential Creditors or potential employers.  There are laws governing all of you in order to protect each of you.  To break it down further…

Obtaining Your Credit Information

Once a year, you should check your Credit Report for accuracy and to guard against Identity Theft.  Since Creditors may report to one or more Credit Reporting Agencies, it is suggested that you request a report from each.  Married couples should each request a separate report from all three agencies, as the information may be different for each spouse.

You can also obtain a copy of the Credit Reporting Agency’s Credit Score for you.  These are not a part of your Credit Report, so must be requested separately (or, in addition to).

In The United States…

In the US, as of September 1, 2005, you may now request one free annual Credit Report, every 12 months, from each of the three major Credit Reporting Agencies.  The three agencies have created a central location for you to obtain these reports.  By law, ONLY www.annualcreditreport.com has been authorized to provide these free reports.  Be leery of any other organization that offers you a “free” Credit Report, as many times there ARE fees.

Obtaining Your Credit Information

Once a year, you should check your Credit Report for accuracy and to guard against Identity Theft.  Since Creditors may report to one or more Credit Reporting Agencies, it is suggested that you request a report from each.  Married couples should each request a separate report from all three agencies, as the information may be different for each spouse.

You can also obtain a copy of the Credit Reporting Agency’s Credit Score for you.  These are not a part of your Credit Report, so must be requested separately (or, in addition to).

In Canada…

In Canada, you may request a copy of your credit report by mail (FREE) or online (FEE) from the major Credit Reporting Agencies.  In addition, you may request your Credit Scores, though there is a fee.

Whether you are in Canada or the United States, when the Credit Reporting Agencies send your credit report, they will furnish you with information on how to read it, since each is slightly different. (For a sample, click HERE.)

You will want to read through the entire report (and its instructions) very carefully. It will contain four basic types of information: personal information, account records, credit inquiries, and public record information. I suggest using a highlighter as you read through your report, highlighting any information that you think needs to be corrected.

Following these guidelines below will help you as you read through your credit report: