Easy ways to improve credit

What a great question. Not only because a lot of other people have a similar concern, but you've given me an opening to mention that by the end of the year the "Dummies"-book people will have a new book out, by Mrs. Bucci's good-looking son, specifically designed to help folks like you repair their credit.

Your situation is not uncommon and there are a few simple things you, and anyone else having trouble establishing a good credit history, can do to get your credit back on track. This includes not only people with bad credit, but also people with no credit history at all. Young people, those who pay cash for most purchases, the recently divorced or widowed and immigrants are also among those who may need help with credit.

Here are five suggestions anyone can use to rebuild credit.

1. Get a secured credit card. Secured credit cards report your credit-payment-history information to credit bureaus just like a regular credit card. They are "secured" by your money, which you deposit in an FDIC or NCUA insured bank account for this sole purpose. You can get one for free if you look around.

2. Get a department-store card. These cards are often easier to qualify for than a general-purpose bank card. Be aware, though, that they may carry a high interest rate. Be sure to pay your charges on time, and in full, each billing cycle to avoid paying interest. You will still accomplish your goal of building positive credit in your name, with the bonus of staying out of debt.

3. Give yourself a loan. Open a passbook savings account in a bank or credit union. Then take out a low-interest loan using the passbook as security. The bank will report the loan-payment experience to the credit bureaus and your credit will improve.

4. Get a copy of your credit report. If you are being turned down for credit, you need to be sure the reason is valid. Many credit reports have errors. With over 1 billion items a month showing up at each bureau, it's no wonder some end up in the wrong credit report. Dispute any inaccuracies you find.

5. Get a credit report from all three bureaus. Each one may have different information and maybe errors in your file. You can't know which bureau's data will be used to evaluate your credit application, so check them all. One last suggestion: Don't apply for every card offer that comes your way. Each one generates an inquiry in your file. Too many inquiries can hurt your credit. The thing to remember about your credit report is that time is your best friend. As you keep adding positive information to your credit report over time, any negatives will first be diluted and then begin to recede in importance.

I also suggest that you develop a workable budget if you don't have one yet to keep surprise expenses from sabotaging your efforts to rebuild your credit. Good luck!

(Steve Bucci is president of CCCS Credit Advisors. Visit www.creditcounseling.org or call 877-311-2227 for additional debt advice. The Debt Adviser is a weekly feature of Bankrate.com. Distributed by Scripps Howard News Service.)

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