Transcripts

"Money File"-Cleaning Up Your Credit Report

SUSIE GHARIB: In the "Money File" tonight, with lay-offs on the rise, it's time to make sure your credit report is in order. Here's Harriet Johnson Brackey, personal finance columnist at the "South Florida Sun Sentinel."

HARRIET JOHNSON BRACKEY, PERSONAL FINANCE REPORTER, SO. FLORIDA SUN- SENTINEL: You should consider your credit report and credit score to be incredibly important right now. The economy's shaky, lenders are capping home equity lines and lowering credit card limits. But worst of all, unemployment is rising. So if you have any fears about your job, you should try to raise your credit score now because you may need to borrow later. Here's how you do it. Do not go to one of those credit repair companies. Two often, all they do is something you could have done yourself for free. Do get a copy of your credit report at each of the three major credit bureaus. Correct any errors, dispute inaccuracies at each bureau. Most negative information should drop off after seven years, so make sure it disappears. Get your payment habits into tip-top shape. Bills paid on time, not one day late, not one. And aim to work off your debt, to get it below 10 percent of your total credit limit. You also might want to take advantage of free credit report monitoring, which the credit bureau Transunion is offering to virtually all borrowers as part of a settlement of a lawsuit. That will alert you to anyone monkeying around with your report. If you do all of these things, you probably will have a good credit profile ready to show to lenders at a moment's notice. That's smart preparation for tough times. I'm Harriet Johnson Brackey.