Blacklisted by Your Credit?

Your credit report is your financial footprint. It is uniquely yours and it serves as your first impression to the financial world. This "first impression" will introduce you to lenders, employers, landlords, and anyone else that needs to know if you are creditworthy.

How impressive are you? I mean, would a potential lender consider you to be on the "A list" of creditworthiness? Or have a few financial mishaps caused you to be "blacklisted"?

Having bad credit can feel like being stranded in line at the hottest nightclub in town, watching all those "A list" celebrities easily get past the red velvet rope. They get quick access to new lines of credit, loans, and apartments, and their credit never holds them back from employment opportunities.

Those with bad credit, on the other hand, never seem to have their names on the list. They must wait outside the club, hoping the bouncer lets them pass.

But the "A list" of creditworthiness is an attainable goal for anyone. With enough dedication, you can get into the club - hassle-free!

Check your credit report first

The first step to reforming your credit report is to know what needs to be fixed. To do so, you have to order your credit report. The Fair Credit Reporting Act entitles you to a free credit report from each credit bureau (TransUnion, Equifax, and Experian) annually. AnnualCreditReport.com is the official government website designed to easily and quickly offer you your free reports.

Once you have the credit report, you need to check it for inaccuracies. Just because you have been financially irresponsible does not mean everything contained in your credit report is gospel. If you discover any errors, dispute them. Dispute errors with the specific bureau that is reporting the incorrect information. You can find the appropriate mailing addresses on the websites of each credit bureau.

It usually comes down to your credit score

Although lenders consider everything in your credit report when they are deciding to extend credit to you, the decision weighs heavily on your credit score. Your credit score is a three-digit number that can range anywhere from 300-850. The higher your score, the lower your risk - and vice versa. Your credit score is based on the information found in your credit report.

There are five categories that make up your credit score: whether you pay your bills on time, the amount of debt you carry, how long you've had credit, the types of accounts you have, and if you've applied for new credit recently. You need to be stronger in these categories before you’ll see credit score improvement. Start by building a good payment history. This is the most important factor in calculating your credit score. Paying your credit card and other bills on time will help your score considerably.

Getting off on the wrong financial foot is not the end of the world. You can still get on the "A list" of creditworthiness with enough time, discipline, and patience. Once you're inside the club, you'll have access to new credit at low interest rates, saving you lots of money!
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This guest post was contributed by LaShon Fryer. LaShon is a freelance writer and blogger for business publications. When she is not writing, she is busy in her children’s apparel store Bring-2-Fruition. In January she will return to her alma mater, Temple University, to pursue her M.B.A. in Financial Management.

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