ANDY'S CONSUMER TIP OF THE DAY: repairing bad credit

ANDY'S CONSUMER TIP OF THE DAY: repairing bad credit

MEMPHIS, TN (WMC) - I saw one of those signs on the side of the road the other day. You know, one of those signs that posts a phone number with the words "credit repair" or "fix your credit"? I did the best thing a consumer advocate can do with one of those signs.

I stole it and tossed it in the closest dumpster I could find.

I stole it because it's a scam. No one can repair your credit for a fee. No one can repair your credit period. No one can remove negative information from your credit report. Only you can repair your credit through discipline and direct contact with your creditors and with the three credit bureaus.

REPAIRING YOUR CREDIT:

* CHECK YOUR CREDIT REPORTS ANNUALLY. By federal law, you are entitled to obtain a free credit report every year from each bureau: Experian, Equifax and TransUnion. Get a report from each one at www.annualcreditreport.com. The three reports should match. Look for inaccuracies or mistaken accounts and refute them.

* PAY YOUR BILLS ON TIME.

* PAY DOWN OUTSTANDING DEBT. This takes discipline. Let's say you have a nagging $3,000 balance on a credit card, and the interest is starting to pile up. Consider dividing that balance by 12, then resolve to pay that $250 every month until you've paid off the balance.

* KEEP BALANCES LOW on your credit cards or other "revolving credit." That will help you maintain a respectable debt-to-credit ratio.

* DON'T CLOSE ANY UNUSED CREDIT CARD ACCOUNTS. Having a slightly larger percentage of unused credit can improve that debt-to-credit ratio and, in turn, your credit score.

* By the same token, DON'T OPEN ANY NEW CREDIT CARD ACCOUNTS that really aren't necessary. New applications add what's called an "inquiry" to your credit report. Too many of those can hurt your credit score.

* Consider MAKING PAYMENTS HIGHER THAN THE MONTHLY MINIMUM.

* TRY NOT TO CARRY A BALANCE OF MORE THAN 30 PERCENT OF YOUR CREDIT.

All of this will help you really repair your credit. Oh, and if you see one of those signs, take it and toss it. Just make sure no one sees you.

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