What's the first step in rebuilding credit?What's the first step in rebuilding credit?To avoid getting into financial problems in the future, you must understand your flow of income and expenses. Some people call this making a budget. Others find the term budget too restrictive and use the term spending plan. Whatever you call it, spend at least two months writing down every expenditure. At each month's end, compare your total expenses with your income. If you're overspending, you have to cut back or find more income. As best you can, plan how you'll spend your money each month. If you have trouble putting together your own budget, consider getting help from a nonprofit group such as Consumer Credit Counseling Service (agencies affiliated with the National Foundation for Credit Counseling, at www.nfcc.org), or Myvesta.org, at www.myvesta.org, both of which provide budgeting help for free or at a nominal fee. How many credit cards should I carry?Once you succeed in getting a credit card, you might be hungry to apply for many more cards. Not so fast. Having too much credit may have contributed to your debt problems in the first place. Ideally, you should carry one or two bank credit cards, maybe one department store card, and one gasoline card. Creditors want to see that you can handle more than one credit account at a time. But use all of the cards only if you can pay the charges in full each month. You don't need to build up interest charges on these cards. Creditors may frown on applicants who have a lot of open credit. So keeping many cards may mean that you'll be turned down for other credit -- perhaps credit you really need. And if your credit applications are turned down, your file will contain inquiries from the companies that rejected you. Your credit file will look like you were desperately trying to get credit, something creditors never like to see. How can I get a copy of my credit report?The federal Fair Credit Reporting Act (FCRA), amended by the Fair and Accurate Credit Transaction Act (FACTA), allows consumers to get a free copy of their credit report each year from each of the three major credit reporting companies. Free annual credit reports are now available in every state. To order your free report, go to www.annualcreditreport.com, and either order your report directly or download a form to mail in your request. You can also call 877-322-8228. Note that the World Privacy Forum recommends that consumers may be better served by ordering their credit reports by phone or mail rather than online (see www.worldprivacyforum.org/calldontclick.html for more details). Also, you are entitled to one free copy of your credit report each year under the following circumstances:
The three major credit reporting companies are Equifax, TransUnion, and Experian. It's best to order your report from all three. If you do not qualify for a free report (for example, you have already ordered your free report for the year, or free reports are not yet available in your state), there will be a small charge. The amount will vary from state to state because it is mandated by state law ($8.00 in California, $9.50 in many other states). To order directly from one of these credit bureaus, call, email, or visit the company's website. Equifax TransUnion LLC Experian When you request your credit report, you'll need to provide the following information:
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