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A Healthy Credit Report

Understanding how credit affects you is easier than you think, and, very important. Whether you have great credit, no credit, or in process of rebuilding your credit following these steps may improve your financial health.

1. Your Right.
You have the right to verify your credit once a year from all three of the major credit reporting agencies. These agencies will provide a copy of your credit report free once a year for residents of the state of Maryland; members from other states may incur a small fee. Knowing what is on your credit report before you apply for a loan, gives you time to research, correct problems and/or errors, and gives you piece of mind that your credit is in good standing.

If you have been denied credit, the Equal Credit Opportunity Act requires creditors to tell you the reason you were rejected (if you ask) for 60 days after being denied. If it’s due to your credit, the creditor will suggest you contact the agencies below for a copy of your credit report.

2. Bonus Reward.
You have the right to prohibit the sale of your credit information contained in your credit file with any consumer credit reporting agency. Contacting the credit agencies below not only gives you the opportunity to check your credit, but it enables you to limit or prohibit the agencies from selling your information to a business in which you do not already conduct business.

3. Making Contact.
You can notify the following nationwide credit bureaus in writing or by calling their toll-free telephone numbers:

When you write to any of the above credit bureaus, be sure to include your full name, complete address, social security number, date of birth, daytime telephone number, and signature.

4. Taking a closer look.
Once you have received a copy of your credit reports, understanding what financial institutions are looking for, and, what you can do to maintain or improve your credit rating may save you money and help your chances of obtaining credit in the future.

Payment history. How you handled credit in the past is the major factor in how financial institutions think you will pay a new loan. Non-payments, late payments, and other negative entries can stay on your credit report for up to 10 years. Making regular, consistent, on-time payments is key to a positive report.

Outstanding Debt. Large balances and the types of loans you have make a big difference. Having many credit cards near or at their limits is negative. Having a few credit cards that are occasionally used, always paid on time, and do not float near their maximum credit limit is positive.

Time in file. The length of time you have had credit can make a difference. The longer you've been "in file" (and can show on-time consistent payments) the better. If you are new to credit, or have a short credit relationship, the less the financial industry knows how you are going to handle credit. Remember, they are taking your word that you will pay. If your word is backed by a credit report with consistent on-time payments, they are more likely to believe you.

Type of Loan. Loans that are secured by a house or automobile establish stability and are more favorable than personal loans. Having a mix of credit types is helpful. A few credit cards and some secured debt is good. Beware of high interest finance companies. They can lead to trouble! Its better to rely on your Credit Union and avoid the high rates and fees associated with finance companies.

5. Reaping the benefits.
How you pay your bills affects your ability to get credit, and may save you time and money. Being in charge of your credit can lead to many credit rewards.

For more information concerning understanding credit and to speak with a Loan Counselor contact the Credit Union's Loan Department. Click here to contact the Credit Union by email.