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Why Your Credit History is Important 
Although creditors usually consider a number of factors in 
deciding whether to grant credit, most creditors rely 
heavily on your credit history. To learn how you have 
handled credit in the past, most creditors obtain a report 
from your local credit bureau. Credit bureaus gather and 
sell credit information about consumers and are a principal 
source of information about your credit history. Your credit 
bureau report is based on information supplied over time by 
your creditors. It also provides information on where you 
live and work and may note other matters of public record 
such as judgments or bankruptcies. Your report records 
payments you have made on credit cards, installment loans, 
and other credit accounts and helps creditors predict 
whether you are likely to be a good credit risk. A history 
of timely credit payments helps you get additional credit. 
Some creditors are reluctant to grant credit to 
consumers-who have not established a "track record" with 
other creditors first. In addition, many creditors will not 
extend credit to consumers with a history of delinquent 
payments, repossession, judgments, or bankruptcy. If you are 
in either situation, be wary of ads that promise you 
"instant credit" or "a major credit card regardless of your 
lack of credit history or your past credit record." The fact 
is that all legitimate creditors want to know whether you 
are likely to be a good credit risk. Whether you get credit 
will depend on whether your qualifications meet the 
creditor's criteria. No one can guarantee you credit in 
advance.  
How to Build A Credit History and Establish Credit 
Building a good credit history is important. If you have no 
reported credit history, it may take time to establish your 
first credit account. This problem affects young people just 
beginning careers as well as older people who have never 
used credit. It also affects divorced or widowed women who 
shared credit accounts that were reported only in the 
husband's name. If you do not know what is in your credit 
file, check with your local credit bureaus. Most cities have 
two or three credit bureaus, which are listed under "Credit" 
or "Credit Reporting Agencies" in the Yellow Pages. For a 
small fee, they will tell you what information is in your 
file and may give you a copy of your credit report. If you 
have had credit before under a different name or in a 
different location and it is not reported in your file, ask 
the credit bureau to include it. If you shared accounts with 
a former spouse, ask the credit bureau to list these 
accounts under your name as well. Although credit bureaus 
are not required to add new accounts to your file, many will 
do so for a small fee. Finally, if you presently share in 
the use of a credit account with your spouse, ask the 
creditor to report it under both names. Creditors are not 
required to report any account history information to credit 
bureaus. If a creditor does report on an account, however, 
and if both spouses are permitted to use the account or are 
contractually liable for its repayment, under the Equal 
Credit Opportunity Act you can require the creditor to 
report the information under both names. When contacting 
your creditor or credit bureau, do so in writing and include 
relevant information, such as account numbers, to help speed 
the process. As with all important business communications, 
keep a copy of what you send. If you do not 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. Or you might borrow a small amount from 
your credit union or the bank where you have checking and 
savings accounts. A local bank or department store may 
approve your credit application even if you do not meet the 
standards of larger creditors. Before you apply for credit, 
ask whether the creditor reports credit history information 
to credit bureaus serving your area. Most creditors do, but 
some do not. If possible, you should try to get credit that 
will be reported. This builds your credit history. If you 
are rejected for credit, find out why. There may be reasons 
other than lack of credit history. Your income may not meet 
the creditor's minimum requirement or you may not have 
worked at your current job long enough. Time may resolve 
such problems. You could wait for a salary increase and then 
reapply, or simply apply to a different creditor. However, 
it is best to wait at least 6 months before making each new 
application. Credit bureaus record each inquiry about you. 
Some creditors may deny your application if they think you 
are trying to open too many new accounts too quickly. If you 
still cannot get credit, you may wish to ask a person with 
an established credit history to act as your co-signer. 
Because a co-signer promises to pay if you don't, this can 
substantially improve your chances of getting credit. Once 
you have repaid the debt, try again to get credit on your 
own.  
What Can Be Done to Improve a Bad Credit Report 
You are entitled by law to correct any inaccurate 
information that appears in your credit bureau file. If a 
creditor rejects your application because of negative 
information in your credit bureau report, it must identify 
the credit bureau involved. At your request, the credit 
bureau must disclose the contents of your credit file. If 
you act within 30 days of being turned down, there is no 
charge for this service. Check to see whether the 
information in your credit report is accurate and complete. 
You have the fight, under the Fair Credit Reporting Act, to 
dispute the completeness or accuracy of any information in 
your report. When you do so, it helps to tell the credit 
bureau, in writing, why you think the information is not 
correct. Unless your dispute is frivolous or irrelevant, the 
credit bureau then must reinvestigate the matter. The credit 
bureau must correct any information that it finds is not 
reported accurately. Information that cannot be verified 
must be deleted. If you disagree with the results of the 
credit bureau's reinvestigation, you may file a brief 
dispute statement explaining your side of the story. At your