How’s Your Credit?

By Eleanor Ashton

So, what’s the big deal about credit? These days, bad credit can hurt your chances of getting a loan or raise your rates if you do get one; and, as more employers check credit reports, it can even cost you a chance at a job or promotion.

Here are some guidelines:

Know your credit!

There are often mistakes on credit reports, which can pull down your score. To find out about your credit from all three credit reporting agencies (Equifax, TransUnion, and Experian) for free, go to www.annualcreditreport.com.)

If you need to track your credit, you can pull one agency’s report in the first part of the year and then stagger the two others throughout the year. If you find mistakes, write to the agency (you can’t call or email) and include documentation.

You can also pull your credit score for around $8. A good credit score is around 720 or higher, but lenders work with lower scores when you have good reason for the credit issues.

Be careful about taking out new credit!

Any time you open up a new card at a store or apply for a loan, and your credit history is checked, it lowers your score. Remember: you have the right to ask a lender not to pull your credit until you are fairly certain of getting a loan.

If you have never established credit in your own name or have damaged credit, one option is to take out a share secured loan—a loan based on collateral (secured) with a co-signer (shared)—from a local credit union.

Self-Help Credit Union offers a Credit Builder Loan through its retail division, Carolina Mountains Credit Union (CMCU), located at 1911 Hendersonville Road.

This program has three steps:

a)   Apply for a loan in the same amount as an amount in your savings account. (Your savings are the collateral on the loan.)

b)   Make payments ON TIME on the borrowed funds. Each time you make a payment, Self-Help sends notification to the credit bureaus, boosting your credit.

c)   Pay off the loan, and they will release the full amount of the loan, plus all accrued interest. So you basically make yourself a loan, earn some interest, and get improved credit in the bargain!

Because the loan is secured with your savings account, there is no credit check. For more information call CMCU at (828) 676-2196, or stop by the office at 1911 Hendersonville Road. This loan is ideal not only for folks with weak credit but also for young people establishing credit for the first time.

Be credit savvy, and keep good credit. The best way to beat the game is to be on top of it!