Three Rules of Thumb To Learn How to Manage Your Credit Wisely

1. Pay Your Bills on Time

This is the single most important thing you can do. How you've paid your bills in the past is usually the best indicator of how you'll pay in the future. Be sure to pay at least the minimum amount required by the date it is due on your account statement or invoice. You can always pay more, but you should never pay less than the minimum. Remember - being late on a payment is a negative mark on your credit record, even if you make up the payments later. If you don't pay your bills on time, you can start today! Credit scores emphasize your most recent payment record.

2. Keep Credit Card Balances Low

Don't apply for too many loans or too many credit cards. This might be interpreted as a sign that you can easily get in over your head on payments you owe. Don't charge as much as your credit limit allows you to charge. Think about closing down accounts you never use and try to keep credit card balances low on your remaining credit lines.

Remember, though, that it is good for you to use credit because it demonstrates your ability and willingness to pay your bills. You must have some credit history to have a credit score. If you rarely or never borrow money or use a credit card, consider applying for a few credit cards and using them carefully, paying off the debt each month. But keep your overall debt at a reasonable level relative to your income.

3. Make Sure Your Credit Records Are Accurate and Protect Them!

It's important that you review your credit reports from each of three private companies - Equifax, Experian and Trans Union - at least once a year to make sure they are right. Your credit record, and therefore, your credit report may vary from one company to the other. You don't want your credit score or mortgage application to be based on incorrect information in any of your reports. Simply contact all three companies that report on your credit - or national credit repositories as they are often called - listed below. If you''ve been denied credit, you can get your credit report for free by following instructions in the written notice you received when they denied you credit. Otherwise, you can receive a copy for a minimal fee.

Equifax
Credit Information Services
P.O. box 740256
Atlanta, GA 30374-0256
Phone: 1-800-685-1111
Web Site: www.equifax.com

Experian
National Consumer Assistance Center
P.O. Box 949
Allen, TX 75013-0949
Phone: 1-800-682-7654
Web Site: www.experian.com

Trans Union
National Disclosure Center
P.O. Box 390
Springfield, PA 19064
Phone: 1-800-888-4213
Web Site: www.tuc.com

If you believe that any one of your credit reports contains mistakes and you wish to dispute or change the mistake, contact the national credit repository that developed the report. Under the Fair Credit Reporting Act (FCRA), the repository must complete an investigation of your disputed items within 30 days and provide you written notice of the results of the investigation within five days of its completion, including a copy of your credit report if it has changed based upon the dispute.

The Federal Trade Commission (FTC) is responsible for enforcing FCRA. The FTC also publishes consumer-related credit brochures where you can obtain additional information on credit reports. To contact the FTC, call or write:

Federal Trade Commission
Public Reference Branch
6th & Pennsylvania Avenue, N.W.
Washington, D.C. 20850
Phone: 202-326-2222
Web Sites: www.ftc.gov/ftc/consumer.htm and www.ftc.gov/ftc/moreinfo.htm

Information provided by Freddie Mac and the National Association of REALTORS®