Financial Ed 101: Seven Tips for Establishing Good Credit - Inland ...

Having a good credit score is increasingly important, as more Americans rely on credit to make daily and major purchases.

Not only can poor credit history hurt you when you?re taking out a loan, signing a lease or buying a car, but some employers do credit checks on job applicants ? weeding out anyone who hasn?t demonstrated financial responsibility.

?Our recent Ally Wallet Wise ?Financial IQ Quiz? revealed that many people struggle with understanding how to establish good credit,? said Beth Coggins, Director of Community Relations at Ally Financial. ?The importance of a solid financial education for your success and well-being cannot be overstated.?

Ally Wallet Wise, a financial education program from Ally Financial, offers some tips on taking better control of your finances and personal credit:

1. Make sure you know what is included in your credit report. It is important to review your credit report at least once per year to ensure there aren?t any mistakes and you have not been the victim of identity theft. Your credit report contains information about you and your payment history. It?s collected and organized by a credit reporting agency and is available to those who are considering granting you credit. Your credit score is a number that reflects the information found in your credit report.

You can obtain a free copy of your credit report once every 12 months by visiting www.AnnualCreditReport.com

2. Create a budget and stick to it. Understand needs versus wants and avoid using credit to buy things you cannot afford.

3. Pay your bills on time. Your payment history is one of the most important factors when determining your credit score. You are usually considered a good credit risk if you have a history of paying your bills on time.

4. Have a small amount of total debt. Make sure your total debt is not too large. If a large portion of your income each month is already committed to paying off other credit, creditors may be hesitant to extend you additional credit.

5. Don?t have a lot of open credit. Excess open credit can result from having too many credit cards. While you may think having a lot of credit cards with high limits is a sign that you have good credit, creditors may look at your available credit as being a potential debt. In other words, creditors may believe too much open credit may lead you to overextend yourself in the future.

6. Only use a small amount of your total available credit. Creditors like to see that you use your credit with restraint ? using some but not ?maxing out? your cards.

7. Showcase that you are stable and responsible. Creditors look for signs of stability and responsibility. Numerous changes in address and/or employment may hurt your rating.

For more tips, or to take a free online personal finance course or find a local event in your area, visit www.AllyWalletWise.com.

Source: http://www.inlandvalleynews.com/2012/10/10/financial-ed-101-seven-tips-for-establishing-good-credit/

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