How Often Can a Creditor Pull Your Credit?

Companies with which you do business, and even your employer, can pull your credit report to check financial information. Credit inquiries are recorded each time someone checks your credit and will appear on your credit report. You can see the number of inquiries any time you check your own credit report. Only companies with legitimate business needs can pull your credit, according to the Fair Credit Reporting Act. Whether a company makes a hard or soft credit inquiry can also affect how the inquiry appears on your credit report.

Limits on Inquiries

There is no legal limit on the number of times a creditor can pull your credit history, according to the Fair Credit Reporting Act. However, companies may have internal standards for how often they check credit based on situation. The frequency may be higher for delinquent accounts. There is a limit on how long credit bureaus can keep information on a credit report, ranging from seven to 10 years. Public records and derogatory account information can remain for up to seven years. Chapter 7 bankruptcies and information about closed or inactive accounts can stay on a credit report for up to 10 years. Reports of an unpaid tax lien can remain indefinitely.

Hard Inquiry

Hard credit inquiries are a result of requests for new credit. Hard inquires include applications for a mortgage, auto loan, credit card or personal loan and collection agency skip-tracing. Hard inquiries can, but don't always, affect your credit score. The more hard inquiries you have in a 12-month period, the more likely it is that those inquiries will lower your overall credit score, according to Mint.com, a financial management company.

Soft Inquiry

A soft credit inquiry is a credit check for any reason other than opening new accounts. Examples of soft credit inquiries include pulling your own credit report, preapproval letters sent by lenders and when companies you do business with or your employer periodically views your credit. Soft inquiries will not appear on credit reports and have no impact on a person's overall credit score.

Inquires and Credit Score

You can request that consumer reporting agencies not share your information on mailing lists for solicitation of new credit. Opting out can decrease the number of new credit checks that come with applying for additional credit. Opt out by phone, online or mail. Call 888-567-8688 to notify Experian, Equifax and TransUnion that you want to opt out of prescreened credit offers. You can also opt out at the OptOutPrescreen website. Opting out will not prevent companies you do business with from pulling your credit.

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Can an HOA Ruin Your Credit?

Residents of many neighborhoods are required to pay fees to homeowners associations that are tasked with maintaining communal areas and enforcing rules pertaining to the maintenance of homes in the community. Failing to pay your HOA fees on time could have a negative effect on your credit score, even if your HOA does not directly report the missed payments to the credit bureaus.

Escrow

In many states, an HOA can place a lien on your home if you fall behind on your association fees. Consequently, lenders often require you to escrow your HOA payments along with your property tax and insurance so that your lender can protect its own lien position by ensuring that these home-related costs are paid on time. If you escrow your HOA payments, you can only fall behind on payments if you fail to make your mortgage payment. If you miss your mortgage payment by more than 30 days, your lender notifies the credit bureaus, and frequent late payments can cause serious damage to your credit score. Therefore, you could see your score drop when you miss an HOA payment even if the HOA does not notify the credit bureaus.

Reporting

A creditor can only make reports directly to the credit bureaus if they have established a reporting relationship, which requires fees at setup. HOAs do not usually set up reporting relationships with credit bureaus. However, many HOAs contract collection agencies to help collect unpaid debts, and collection agencies do have reporting relationships with credit bureaus. If you do not settle the debt before the HOA hires a collection agency, you should expect to see your score suffer when the agency reports the past due debt.

Court Action

If you fail to settle a past due HOA debt, the association could take you to court since laws in many states allow HOAs to garnish your bank account or wages. While credit reports mainly consist of information the credit bureaus receive from your creditors, the credit bureaus also gather information from public records. If the court issues a judgement against you, the credit bureaus could find out about that judgement by checking court records. The judgement would thereafter appear on your credit report and have a damaging impact on your credit score.

Foreclosure

In some states, HOAs can foreclose on your home if you fail to pay your association dues. Foreclosures involving HOAs are often non-judicial, which means the HOA can foreclose without going before a judge. Foreclosures, whether court ordered or non-judicial, appear on your credit report. Negative credit events remain on your credit file for seven years, and it can take many years for your credit score to recover. Therefore, failing to pay your HOA dues could ruin your credit even if the HOA members do not proactively contact the credit bureaus in relation to the debt.

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Building Credit Without Credit Cards

An individual's credit report contains information on all types of borrowing he has done, including not only credit cards, but also loans. If the credit report is empty, the individual does not have a credit score and will have trouble obtaining most types of credit. Although credit cards are one of the easiest ways to build credit, several other types of accounts appear on the credit report and help a consumer build credit.

Student Loans

Because credit card companies have tighter restrictions on credit cards for individuals under 21, one of the best ways for young people to start building credit is through student loans. Federal student loans, such as Perkins and Stafford loans, report payment history to the credit bureaus and do not require the student to have any credit history. Banks and credit unions also offer private student loans that can help students who have a creditworthy cosigner build credit. Some student loans require that the student make interest payments while in school, whereas others defer all payments until after graduation. Students should pay their loan bills every month and make extra payments whenever possible to build positive credit history. However, the loan might not help build credit history until they start making payments.

Secured Loan

People without credit history might have a hard time obtaining a traditional loan, such as an auto loan or mortgage. One alternative for building credit is to get a secured loan from a credit union. The borrower deposits money in a savings account or buys a certificate of deposit and obtains a loan for that same amount. The loan is secured by the deposit, meaning that the credit union can use the deposit to pay back the loan if the borrower fails to pay. Before getting a secured loan, the borrower should confirm that the credit union will report the payment history to all the credit bureaus.

Other Loans

After building some positive credit history, borrowers can often qualify for other types of loans. Two common ones are auto loans and mortgages. These loans are secured by the car or home, so the lender can seize the asset if the borrower does not make payments. Making regular, on-time payments on a mortgage or auto loan over a long time builds an extensive credit history for the borrower.

Credit Card Considerations

Although credit cards can help irresponsible borrowers get into more debt than they can handle, they will help someone build credit more quickly than is possible with just installment loans. This is because part of the credit score is based on the different types of accounts open, and a credit card falls into the category of a revolving account. Individuals can become authorized users on other people's credit card accounts to gain that credit history without taking the risk of being responsible for the debt. Another option for people who fear overspending is to get a charge card, which must be paid in full each month. A credit card with a low credit limit is another way to keep control of spending.

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Can I Build Credit at Rent a Center?

If you hope to rent merchandise through Rent-a-Center to build credit, you are doing it the hard way and spending far more than the retail price for an item. Rent-a-Center is one of the nation's largest rent-to-own companies -- a firm that rents items on a weekly or monthly basis. You can build credit but not with the traditional credit reporting companies that most lenders prefer.

Identification

Rent-a-Center does not report to the credit bureaus nor does it perform credit checks on its customers, according to the Rent-a-Center website. Since Rent-a-Center does not subscribe to any credit reporting service, it cannot help build credit history. Instead, the company relies on personal references and tracks customer payment history itself to approve purchases.

Damage to Credit

In a worst-case scenario, buying an item from Rent-a-Center could damage your credit if you do not pay your bill. The company could sell your debt to a collection agency, which would then probably report it to the credit bureaus. Collection accounts of any size are terrible for your credit and just a little bit worse than bankruptcy in terms of credit scoring.

Alternative Credit Agency

You can report good payment history with Rent-a-Center to an alternative credit agency. Alternative credit bureaus report data outside the realm of the national credit bureaus. As of 2011, alternative credit bureau reports are not widely accepted by lenders, but the largest credit reporting and scoring companies in the U.S. are compiling data to determine if alternative payment data is just as predictive as traditional credit history. However, you will have to pay an alternative agency a monthly fee to have it report your Rent-a-Center history.

Tip

Starting a credit history with the national credit bureaus is usually preferable to an alternative credit history. Look at retail, gas and secured credit cards to start or rebuild a credit history. Retail and gas cards have low limits and high interest rates, so watch out for annual fees that could eat up a significant portion of your credit limit. Secured accounts require a payment on the line of credit but can become a regular credit card account with enough payment history. You can also co-sign on an existing account in good standing or become an authorized user on a relative's credit card.

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What Are the Benefits of a Perfect Credit Score?

Very few Americans have a credit score of 850, the highest score you can get. Having that perfect score simply means more financial options will be open to you, from credit cards to investments.

Credit Cards

With a perfect score, credit card companies will offer you their premium choice cards, including cards with no annual fees, zero percent interest rates and higher credit limits.

Loans

Thanks to your high score, lenders will have fewer questions about your credit stability and make loan approval decisions faster, with less paperwork requirements.

Employment

Employers checking a credit score as part of a pre-employment background check will conclude that you're responsible, reliable and stable in your personal and professional life.

Investments

Banks and investment companies will be more likely to offer you their premium or otherwise hard-to-obtain products.

Perks

With your perfect credit score, businesses that make their decisions based on credit history may offer you added perks for free that you would not receive otherwise. These can include concierge services or VIP status and treatment.

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How to Get My Credit Beacon Score

Credit scores play a large roll in determining whether a loan will be approved and at what interest rate. There are three main credit reporting agencies: Transunion, Experian and Equifax. The FICO score is commonly used when applying at a lender for mortgages, car loans, unsecured loans and credit cards. Each credit reporting agency has their own formula to determine the FICO credit score. The Beacon score is the FICO score Equifax provides to lenders.

Instructions

1

Go to annualcreditreport.com. This site allows you to access your credit report from all three major credit reporting agencies (Transunion, Experian and Equifax) but will not give you your credit score. Fill in your personal information. If you have resided at your current residence less than 2 years, you will be required to input your previous address.

2

Select if you would like to get your credit report from all three credit reporting agencies or just one. The Beacon credit score is provided by Equifax. By selecting only Equifax, you will be transferred to their website. Equifax will verify your information and ask security questions, such as giving you a list of who your mortgage is through and cities you have lived in, to verify your identity.

3

Review the report. Click on each account type (Mortgage, Installments, Revolving and Other) for accuracy. Review all open and closed accounts for accuracy. A report with errors will have an impact on your score. On each creditor account there is a link to show details and you can find contact information for each. If there are errors, contact with the creditor in question before requesting your credit score.

4

Select the option to pay for your score if there were no errors on your report. The costs through Equifax is $7.95 for this one time use.

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When an Account Is Closed for Cause Would This Be the Start of an SOL for Reporting?

Millions of people each year have their bank accounts closed "for cause," which means the owner had a negative balance, such as taking out more money than he has in his account. If you are worried about when this account might leave your record, the day the bank closes does not necessarily start the Statute Of Limitations. The SOL starts with the date of the initial delinquency.

ChexSystems

The SOL for federal credit reporting starts on the date of the first major delinquency. Bank accounts closed for cause usually appear on a ChexSystems report. Normally, banks do not report account data to the credit bureaus so they use ChexSystems, which is like a credit reporting agency. As soon as the bank reports your account to ChexSystems, the SOL, which lasts five years, begins.

Credit Report

A delinquent bank account can appear on your credit report if the bank sells it to a collection agency or, although unlikely, reports the delinquency to the credit reporting bureaus itself. As soon as someone reports the delinquent bank account, the SOL on it starts. Delinquent accounts can appear on your credit report for seven-and-a-half years -- 180 days after the first major delinquency, plus seven years.

Restarting the SOL

If the bank sells the account to a collection agency, this does not restart the SOL, only the date of last activity. The date of last activity has no bearing on the SOL for reporting. However, the bank or collection could restart the statute of limitations if you negotiate a payment and then default on that agreement.

Tip

Ask your bank for overdraft protection services or to link your accounts together to stop negative balances. The fees for this service usually are less than a bounced-check charge and save your credit or ChexSystems rating. You could negotiate with the bank to pay off the balance due in return for the bank declaring the account an error. Watch your consumer credit report and ChexSystems report for the correct charge-off date. You receive one free report from each agency as long as you use Annual Credit Report or Consumer Debit.

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How to Pay Off a Derogatory Debt

A derogatory debt is a bill or loan you failed to pay. The creditor or debt collector still expects payment and may list the account on credit reports as a charge-off or collection account. Some people engaging in credit repair start by reviewing their credit reports for derogatory debts. Their intent is to increase their credit score by paying the derogatory items while making timely payments on current bills. Paying derogatory debts may not immediately improve your credit, but it does show future creditors that you are resolving old credit problems.

Instructions

1

Get a copy of your credit report from AnnualCreditReport.com. The website issues free credit reports under the terms of the Fair Credit Reporting Act. It's only site endorsed by the Federal Trade Commission as a source for completely free reports.

2

Read the report to identify derogatory debts. Look for charge-offs, collection accounts and court judgments. A charge-off is an account the creditor closed after you stopped making payments. A collection account is a charged-off account assigned to a debt collector. Court judgments are court orders requiring you to pay money to a debt collector or creditor for an unpaid debt.

3

Get a contact number from the credit report for the creditors or debt collectors on derogatory items.

4

Rank the derogatory items from the lowest balance to the highest. Pay them one at a time as your budget allows. Call the first debt collector with the lowest balance and indicate that you wish to settle the debt for 20 percent of the balance. Paying the debt in full isn't going to significantly improve your credit score, so you should pay as little as possible to resolve the delinquency.

5

Negotiate with the debt collector if the agency will not accept 20 percent. Gradually increase your offer but do not exceed 50 percent. Move on to the next debt if the debt collector will not accept 50 percent. Offer the next debt collector 20 percent as you begin a new round of negotiations. Continue calling through your list until you have a deal.

6

Get terms of agreements in writing before paying by cashier's check. Ask that the debt collector specify in writing that upon receipt of your cashier's check the debt collector will consider the account paid. The debt collector must also agree to update records on your credit report to show the account as "settled" or "settled for less than the full balance." Also, the debt collector should list charge-offs as "paid charge-offs" and judgments as "paid judgments."

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Does the IRS Send Reports to Credit Bureaus?

The IRS can take away your salary, put a lien on your property and ruin your credit if you do not pay taxes. On the flip-side, while paying taxes shows fiduciary responsibility, the IRS has no affiliation with the credit bureaus so paying on time won't win you any points. Actually, it is the credit bureaus that will try to find out about disputes with the IRS.

Identification

The IRS does not actively report delinquent or successful payment to the credit bureaus, according to the IRS website. Credit bureaus, however, actively search for public judgments against consumers, which includes IRS tax levies and liens. Thus, the IRS does not need to report to any credit rating agency, because the agencies do that for the IRS.

Effects

If a credit agency finds out about an IRS tax lien, it will stay on the consumer's report for seven years after satisfactory payment or 10 years if left unpaid and cause havoc on a credit score. An IRS lien could cause someone to become too risky for a commercial loan and even unemployable to employer who runs credit checks on applicants.

Tax Lien Verification

The only time the IRS communicates directly with a credit agency is when a consumer disputes a tax lien. If the IRS verifies the lien, the credit bureau notifies the consumer within five days of verification. Carreon and Associates suggests paying off the tax lien if possible and then waiting six months to dispute the lien with the credit agencies. Once a taxpayer resolves his tax bill, the IRS may not even waste its resources to bother responding to any requests to verify the lien.

Tip

When the IRS tries to collect on a tax bill and it looks like the payer can never afford the full amount, the IRS may accept a lower settlement called an "Offer in Compromise." In an OIC agreement, it is possible to ask that the IRS claim the lien was "erroneous" as part of the settlement. The IRS, however, rarely accepts compromise offers and it is less likely that they agree to remove any record of the lien.

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Does Running a Report Affect My Credit Score?

You have three main credit reports, maintained by bureaus called TransUnion, Equifax and Experian. The Federal Reserve Bank of San Francisco explains that these reports contain records of all your credit activities. People and companies who run full reports can see information like your accounts, balances and payment histories. Reports are run for various reasons, and sometimes this affects the person's credit score.

Definition

Consumers can run their own credit reports to check them for mistakes and possible fraud. The Federal Trade Commission explains that consumers can get one free copy from each bureau through annualcreditreport.com every year. Lenders and others with valid reasons for running credit reports can also request reports. Generally this happens in response to a credit application, although creditors sometimes view current customer reports when considering credit limit increases or other offers. Banks, insurers and similar companies can buy information based on credit reports to make pre-screened offers to certain qualifying people.

Types

Credit report inquiries are classified as either "soft pulls" or "hard pulls," according to the Lending Tree borrowing website. A soft pull, or soft inquiry, happens when a person's current creditors run a report or companies pre-screen for financial offers like low interest credit cards or insurance policies. Consumer requests for their own reports are also considered soft pulls.

Hard pulls occur when someone fills out an application for a credit card or any type of loan. Lending Tree states that some banks also run reports on people who open accounts.

Effects

Soft pulls do not affect a person's credit score at all. Most hard pulls are visible to anyone who runs a credit report for a year from the inquiry date, according to Federal Reserve Bank of San Francisco, while employment-related pulls show up for two years. Lending Tree warns that hard pulls can lower a person's credit score by up to five points, and the impact lasts for about six months. This may not harm someone with high credit ratings, but a few points can make a difference for those with borderline scores. These individuals could be turned down for a loan or required to pay higher interest.

Warning

Lending Tree warns against being drawn into applying for credit to get free gifts or a temporary low interest rate. The credit score impact is often not worth the incentive for opening an account, especially when a person plans to apply for a major loan, like a mortgage, in the near future.

Considerations

FICO states that most lenders understand that consumers shop around for certain loan types, like mortgages and vehicle loans, and that consumers may apply with several companies within a span of a few weeks when buying a home or car. FICO treats a number of report requests from similar lenders within a short time as one inquiry, which lessens the impact to the credit score .

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How to Use Federal Law to Remove Negative Marks From Your Credit

If your credit is poor, you may be able to use federal law to remove negative marks from your credit. The Fair Credit Reporting Act, or FCRA, allows you to receive a copy of your credit report so that you can see what your creditors are saying about you. You are entitled to one free credit report every year or whenever a company takes negative action against you, such as denying your request for credit. Under the law, you have the right to dispute mistakes.

Instructions

1

Order a copy of your free annual credit report. The only place to get an official version is at http://www.annualcreditreport.com. Other companies will show you your credit report, but they will also charge you a monthly fee for credit monitoring unless you cancel your membership.

2

Look for inaccuracies on the report. In particular, look for cases where a company may have incorrectly reported your credit limit, closed accounts are still showing as open or companies have made unauthorized inquiries into your account.

3

Write a letter to the credit bureaus to dispute the errors. The letter should give detailed information about the mistake. Provide copies of any financial data that you have to prove that you are correct, such as bank statements. Keep the originals.

4

Send the letter by certified mail. Someone at the credit agency will have to sign for the letter, so you can be sure that they received it.

5

Follow up if you have not received a response within 30 days. Under federal law, the credit bureau has up to 30 days to reply to your request. If they do not do so, you can contact them to ask where you stand. Eventually, you'll receive a letter detailing the outcome.

6

Repeat this process annually. You should do this every year to be sure that your credit report is correct.

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Student Credit Cards to Build Credit

As many young adults ambitiously start their lives in college, they quickly find that having good credit is imperative to reaching their goals. After all, your credit history affects most of your financial decisions, including entering into a cellphone contract, purchasing a car, buying a home, obtaining insurance and even landing a job after college. Responsible credit usage during college can help you acquire a good credit rating early, streamlining your finances post-graduation.

Secured Cards

If you are young and have no credit history, you may struggle to find a creditor who will open a line of credit for you. Secured credit cards, however, are easier to obtain. You must supply the company with a deposit, usually equal to the amount of your credit line. If you default on your credit card, you lose your deposit and the credit card company will use the money to pay off your debt. On the other hand, if you make responsible payments on your credit card, your credit history will slowly improve, eventually qualifying you for an unsecured credit card.

Unsecured Cards

You need not supply your credit card company with a cash deposit or collateral to secure a traditional credit card. Instead, your lender will provide you with a credit line and interest rate according to your credit score and income. Be careful to choose credit cards with the lowest available interest rates and little to no annual fees. Maintain responsible payment habits and avoid using a large percentage of your available credit, as 30 percent of your FICO credit score is related to your debt-to-credit ratio. With regular payments and card usage, your credit history will continue to grow and improve.

The Credit CARD Act

In 2010, the Federal Reserve implemented portions of The Credit CARD Act to protect young consumers from financial peril and irresponsible credit card usage. According to the Federal Reserve Bank, the law will keep many college-age adults under 21 from acquiring a credit card. If you are under age 21, you must provide creditors with proof of your income or use a co-signer to open a line of credit. Your co-signer must consent to your attempts to increase your credit line or make other major changes to your account.

Considerations

If you are unable to obtain a credit card due to your age, you may have success building your credit in other ways. For example, if your parents finance a vehicle for you, you can ask to add your name to the loan as a co-signer to build your credit history. Similarly, if you must finance part or all of your college tuition, your timely student loan payments will help you build a reputable credit history over time.

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Do It Yourself Credit Repair Tips

Though the Fair Isaac Corporation does not release the formulas used to calculate your credit score, they do release the components of the credit score: your payment history, how long you've used credit, the balances on your accounts, the different types of account you have and the number of new credit applications you've submitted recently. Based on these categories and information from the company, there are a number of steps you can take to repair your credit score if you've made mistakes in the past; however, there are no instant fixes.

Check Your Report for Errors

Under federal law, each of the three major credit bureaus--Experian, Equifax and TransUnion--are required to give you a free copy of your credit report each year. You should check this report to make sure all of the accounts listed on the report are correct. If there is an error, you need to submit a written dispute to the credit bureau explaining what the error is and provide copies of any evidence you have to dispute it. Do not send originals in case they get lost or damaged in the mail. Once the credit bureau has received your dispute, they must investigate your claim within a month. Usually you will receive a letter explaining whether your claim was accepted or denied within 2 months. If your claim is accepted, the incorrect information will be removed from your account.

Contact Your Creditors

Contacting your creditors can lead to alternative payment plans or occasional goodwill adjustments. If you have trouble paying the account minimums, call or write to your creditor to ask if you can set up an altered payment schedule to help you pay your debts. In many cases, lenders are open to working with you because they also lose out if a collection agency has to be used. Any time a collection agency is used, it gets reported on the borrower's credit report, which brings down the credit score. In addition, the collection agency charges the creditor a fee for its efforts to get the debtor to pay so even if the full amount due is recovered, the creditor still ends up with less than they were owed. Also, if you have had a positive relationship with a creditor, you may be able to get them to make a goodwill adjustment, such as taking off a late payment from your record.

Keep the Accounts You Have

If you are trying to bring up your credit score, keep the accounts you currently have open and do not apply for any new sources of credit unless absolutely necessary. Even if you do not plan to use an account again in the future, and it carries no balance, that account will still be reported as being current on your credit report, which will help improve your score. You do not want to apply for any new accounts because each time a lender pulls your score to determine whether or not your can get a new account, an inquiry is recorded on your credit report. These inquiries bring down your score because the more credit you are applying for the more desperate you appear to lenders.

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Credit Score Improvement Secrets

Your credit score is a three-digit number that may seem mysterious, but it is based on very specific formulas developed by Fair Isaac Corp. (FICO) and the TransUnion, Equifax and Experian credit bureaus. All of the formulas use credit report information to determine whether you are a good credit risk. You have the power to boost your score if you understand what goes into its calculation.

Focus on Two Areas

Credit score improvement is most efficient when you focus two specific areas. Credit scoring formulas incorporate a wide range of information, but some areas influence the final number more than others. Sixty-five percent of your score comes from just two areas, according to the MyFICO website. Thirty-five percent is your payment history and 30 percent is your debt load. Improve your score rapidly by catching up late accounts and always paying by the due date, along with paying down as much of your credit card debt as you can.

Keep Credit Cards Open

Closing credit cards when you pay them off does not help your credit score. Doing that can actually hurt you, because it negatively impacts the length of your credit history to get rid of an old account. You also eliminate the credit limit, which may hurt your ratio of available credit compared to how much you owe. Instead, leave unused accounts open and make occasional charges to keep them active. Your credit card companies cannot put fees on your account for non-use, according to the Board of Governors of the Federal Reserve System. However, they can close it out if you never use it.

Get a Loan

You cannot get the highest possible credit score without having different account types. MSN Money writer Liz Weston explains that credit cards, including gasoline and retail accounts, are revolving credit. You need to add installment loans to the mix. Not everyone wants to buy a home and get a mortgage, but you can take out a small personal loan or finance a car to improve this part of your score.

Fix Your Credit Reports

Your credit reports directly affect your credit score because they provide data for scoring calculations. The Federal Trade Commission advises that annualcreditreport.com gives you access to free reports once per year through the Internet, telephone or mail. Find mistakes that are hurting your score, like debt balances that are too high or payments falsely reported as late. You can fill out dispute forms on the credit bureau websites. The law makes them fix mistakes within 30 days, which quickly improves your score.

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How Do Balance Transfers Affect Credit Rating?

Keep the Old Accounts Open

Credit ratings can increase by transferring credit balances from old cards to new ones, just as long as you remember to keep the old accounts open. That way you can increase the amount of credit that is due you, and lower your percentage at the same time. When you lower your debt percentage you also raise your credit score, but watch out: If you cancel your old card when you get your new one, this will decrease your credit balance; as a result your credit score will plummet.

Combining Your Balances

This is due to the fact that your debt is still the same but is not counterbalanced by a higher balance. By keeping both credit cards open, even if not using the old one any longer, you are combining the two balances and thereby increasing your credit balance. It is crucial to not go overboard with the credit cards once you have your credit rating increased. Too many cards tends to increase your debt while lowering your credit rating.

Pay Up Current Debts

It is much better financially to have 25 percent debt or less on your card than it is to have a debt rating higher than that. You should do your best to pay up your current credit debt rather than repeatedly acquiring new credit cards, as this is a sure-fire way to decrease your credit rating. It is much better just to have a few credit cards and keep your debts paid on a regular basis than it is to have multiple cards.

The Best Interest Rates

Using less than 30 percent of all potential credit while keeping all credit cards open is ideal. Always pick the cards that provide the best interest rates, and stop charging on any of your cards until your balance is below that crucial 25 to 30 percent level as this will cause your credit score to rise. There are two basic things you need to remember while calculating your credit rating: how you pay off your debts and how much debt you acquire.

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How to Get All 3 Credit Reports & Scores

Regularly checking all three of your credit reports and scores enables you to manage your finances more accurately. Each credit report may be slightly different, as lenders choose the credit reference bureaus they report to. Checking your credit report and scores will highlight areas where your score could be improved. You can also correct any errors that may be having a negative effect on your score. To get your reports and scores combined, you'll need to pay a fee.

Instructions

1

Apply online. It's a fast and simple way to get your three credit reports and scores. The three credit reporting bureaus are Experian, Equifax and TransUnion. Reports and scores can be viewed online once you have completed the application process.

2

To get your three credit reports and scores from TransUnion, go to its website (see Resources). Click for the 30-day free trial. The monthly payment following the trial is $14.95. Complete the application form carefully and click "Submit." Follow the online directions. Provide your payment details. Your identity will be verified. Click "Submit." Review your application and click "Continue." Your log-in details will be given and you will need to set a password. You can now access your three reports online.

3

To use Equifax to get your three credit reports and scores, go to its website (see Resources). Click "Get Started." The first month's reports and scores are $4.95. Subsequent monthly reports are $14.95. Equifax also provides you with your FICO score, which most lenders use to assess your suitability for credit. Complete the application form carefully. Click "Continue." Online instructions will guide you through the process. Enter your payment details. Click "Continue." Your identity will be verified. Review your application. Click "Continue." Log-in details will be given. Provide a password. Click to view your reports online.

4

Go to Experian's website (see Resources) to get your three reports and credit scores. You get seven days' trial membership for $1, then it's $14.95 per month. Click "Get Your $1 Credit Report & Score." Complete the form. Click "Submit & Continue." Follow the online instructions. Enter your payment details. Click "Continue." Your identity will be verified. Review your details and click "Continue." Follow the log-in directions and provide a password. Your report from Experian can be viewed within 48 hours. It can take three days to access your other two reports.

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Savvy Ways to Build Credit

Credit enables a person to do things such as take out a mortgage on a home, get loans for automobiles, receive student loans for education and even get business loans from the government or a bank. That's why it's valuable to start building good credit as soon as possible. There are many savvy ways to build credit aside from using a traditional credit card.

Checking and Savings Accounts

Opening checking and savings accounts is one of the first steps in building credit. Credit lenders look at checking and savings accounts as a sign of financial stability. Regularly depositing money into your account and avoiding overdrafts shows lenders you are responsible with your money.

Secured Credit Cards

Secured credit cards are one of the safest ways to build credit. With a secured credit card you deposit the amount of your credit limit before you use the card, so you can never overspend. You have to pay a small fee to use a secured credit card, but anyone can be approved for one since they are prepaid. Secured credit cards are also a great option for people who need to repair their credit. A good secured credit card will also convert to a normal credit card after 12 to 18 months of responsible use.

Store Credit Cards

Many retail stores and gas stations offer credit cards to their customers. These cards do not have as large of an impact on your credit score as bank-issued cards do, but they are typically easy to get approved for and often offer additional bonuses to the holder, such as "same as cash" specials and/or customer reward points.

Installment Loans

Installment loans are short-term loans for people with no credit or bad credit. There are also commonly called "payday loans." To get an installment loan, you are typically required to show proof of income along with a utility or cell phone bill. The benefit of using installment loans to build credit is that they are easy to get approved for and can be paid back quickly before lots of interest accumulates.

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Something on My Credit Report Is Wrong

Many television commercials urge consumers to order free copies of their credit reports. The Federal Trade Commission warns that most of those offers have purchase or membership requirements, although genuine free reports are available annually through an official federal website. This access lets people find out if their credit reports are wrong in any way so they can fix the mistakes.

Incidence

Inaccurate credit reports are common. Bob Sullivan, an MSNBC Red Tape Chronicles columnist, states that credit bureaus estimate only 3 percent of reports have mistakes, which would stlll affect 6 million people. He explains that the Federal Trade Commission pegs the number as high as 16 percent, with third parties estimating that 25 percent of all reports contain potentially harmful errors.

Types

Some errors do not affect credit reports but many bring down a person's credit rating. Dayana Yochim, a writer for the Motley Fool financial website, advises that payment dates are the most common problem area, with on-time payments showing up as up to 90 days late. This seriously impacts credit, according to FICO, a major credit score compiler, because payment history has the most weight in score calculation. Other issues include out-of-date demographic or employment information and old accounts that were settled but that are still showing up as open and past due.

Effects

Negative credit report mistakes can affect a person's finances and ability to get employment. The Federal Reserve Bank of San Francisco explains that lenders and employers review credit reports when reviewing credit card and loan applications or screening job applications. They base their decisions on information contained in the reports. If something incorrect in the file makes the person look fiscally irresponsible, it can cause denial of the application.

Considerations

The credit bureaus do not review credit reports for accuracy, so the Fair Credit Reporting Act makes free copies available to consumers every year. Experian, Equifax and TransUnion each provide one free report per person every 12 months if it is requested through the official website, annualcreditreport.com. They also sell reports on their own websites. People can comb through their reports for mistakes, and the FCRA allows them to challenge anything they find. The law forces the credit bureaus to remove disputed information that cannot be properly verified by lenders.

Solution

The dispute process is the solution to erroneous credit report items. The FTC explains that consumers simply need to write letters to each credit bureau stating the reason for each dispute. Enclose documents like statements, receipts or copies of checks to back up the challenge whenever possible. Mail the letters through the post office and request dated delivery receipts. The credit bureaus each have 30 days to contact the lenders related to the disputed items and get verification of accuracy. The items are erased if no proof is provided or if the lenders totally ignore the requests. The bureaus mail out corrected report copies so consumers can see the end result.

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Does Paying Down Debt Increase Your Credit Score?

Paying down debt is one of the best things you can do to improve your credit score and overall credit position. One of the major factors affecting your FICO score computation is debt utilization. This is a comparison of the amount of debt you are currently using as a percentage of your total available credit.

Credit Scores

FICO, named after originator Fair Isaac Corp., is the basis for credit scores reported by Equifax, Experian and TransUnion, the three major reporting bureaus. Credit in use and available credit are included in the amounts-owed category of your FICO score, which accounts for 30 percent of your score, according to the breakdown of the FICO credit scoring model that's posted at the MyFICO website. Credit history and length of credit history make up about half of your score. This includes any late payment marks. The other two categories are types of credit and new credit, with 10 percent contribution each.

Paying Down Debt

Paying down debt means making payments on existing credit accounts, thus lowering your debt utilization on each card as well as your overall debt utilization. Liz Pulliam Weston points out in her MSN Money article "Weird Stuff That Hurts Your Credit" that your FICO score actually rewards credit balances that are smaller and spread across multiple accounts, as opposed to one account with a very high balance.

Debt Utilization Ratio

Lenders want to know what your current credit status is when you apply for a new loan. This is why your debt utilization carries so much weight in the score calculation. Overall debt utilization is important, but your credit score is often most negatively affected if you have a card or two with very high utilization. For instance, a card with a limit of $10,000 and a balance of $9,000 is a very high 90 percent utilization. This appears troubling to FICO and to lenders as well.

Strategy

Based on the relevant benefits to your credit score, Weston suggests paying down cards with high debt utilization ratios before paying off a card with a very low balance. Once all cards are in control, you should pay down those cards with the highest interest rates first. In general, avoiding overuse of revolving credit accounts protects against high debt utilization.

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How Accurate Is a Credit Report?

The Fair Credit Reporting Act requires credit reporting companies to adhere to strict privacy and accuracy rules. However, people make mistakes --- and due to mistakes or identity theft, inaccurate information may slip into your credit report. The best way to keep your credit report accurate is to monitor it yearly, and protect your lines of credit from identity theft.

Definition

A credit report lists more than just your credit card history. It includes your address and previous addresses, every active and inactive bank account in your name, your bill payment history, whether you've been arrested or sued and if you've filed for bankruptcy. The information on your credit report also determines your credit score, between 300 and 850, which provides a snapshot of your creditworthiness (higher is better). When you apply for credit, potential lenders look at your credit report to determine whether you will be a responsible candidate for credit.

Significance

A credit report, while it is an important tool that potential lenders use to make decisions, is not the be-all, end-all. Credit reporting companies make mistakes, too, and unless you regularly monitor your credit report, there's no knowing how accurate your report is. Fortunately, the law allows you one free copy of your credit report annually, which you should use to your advantage and peruse your report for any errors.

Obtaining Your Report

There is only one website from which you can obtain a truly free copy of your report, which is annualcreditreport.com. Plenty of other websites advertise free credit reports, but they may require you to subscribe to their services to obtain your report. You may also obtain your report by calling 877-322-8228, or complete the Annual Credit Report Request Form in "Resources" and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.

Solutions

Some negative information may stay on your credit report long after you've amended irresponsible behaviors. If your credit report is technically accurate but you have become more responsible, you aren't out of options. You can take out a secured loan to rebuild your credit report, or work with a credit counseling agency to pay down existing debt. If you are a victim of identity theft, call your credit issuer immediately. Once you have reported the theft, you are not responsible for any charges made to your account. By law, your maximum liability for unauthorized charges is $50 per account.

Disputing Inaccuracies

It's your responsibility to dispute errors on your credit report. If you don't, you may hurt your chance of obtaining new credit. Start composing a dispute letter by writing down what you believe is wrong (you can include multiple errors in the same letter). Follow this with an explanation of why the information should be removed, and a statement requesting the company to remove this information off your report. Make copies of any important documents that support your claim, and include them with your letter. Don't mail originals. Provide your name, address and a list of your enclosed documents. If you need additional help, the Federal Trade Commission offers free information about disputes and credit problems. To contact the FTC, call 877-FTC-HELP.

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How to Delete a Collection Agency From the CRA

Collections have a negative impact on your credit score. If a collection agency does not report your account situation accurately or a debt stays on your report after 7 years, it can lower your credit score even further. You can dispute the collection agency account if the information is not right or the collection is over 7 years old. A dispute is initiated with a credit reporting agency, and the agency will check over the information. If the data provider doesn't respond to the CRA inquiry or if the account is indeed too old, it will be deleted from the record.

Instructions

TransUnion

1

Go to the TransUnion homepage (see Resources).

2

Click "First Time?" if you need to register an account at TransUnion. Enter your name, address and other requested information to complete the account, then return to the main page. Click "Returning User" and enter your login name and password.

3

Click the "Credit Report" tab. Click "Report Inaccuracy" underneath that. Choose the "Submit Dispute" button.

4

Find the collection agency accounts on this list. Next to each account that you want to remove, click "Request Investigation" and choose the investigation reason. Choose "Submit" to complete the dispute process.

Experian

5

Access the Experian dispute page (see Resources). You need a recent credit report from Experian to dispute a collection account. This report must be no older than 90 days old. The dispute page has a number of ways, both free and paid, to get an Experian credit report if you do not have one.

6

Choose the option labeled "Yes, I have a credit report number." Fill out the form on this page. Click "Submit."

7

Scroll through your Experian credit report account listings until you find your collection agency accounts. Click "Dispute this item" next to every agency account you need to dispute. Explain the dispute reason and click "Submit this dispute."

Equifax

8

Click the Equifax link in the "Resources" section.

9

Enter your personal information. If you have a recent Equifax credit report, enter the credit report number in the first field. This is not a required field. Click "Submit."

10

Choose the correct answer for each personal identification question and click "Submit."

11

Click "Negative Accounts" to get to the listing of all of your negative collection accounts. Click "Dispute this item" for each and every collection account you need to dispute. Input your dispute reason and click "Add Dispute."

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How to Contact a Credit Bureau for Fraud Alert

A fraud alert is an important tool for identity theft victims. The TransUnion credit bureau explains such an alert impedes a criminal's ability to open new accounts in your name. Lenders who see the alert will demand additional proof of identity before extending credit. You must contact the credit bureaus to put this safety net in place.

Instructions

1

Choose a credit bureau with which to file the fraud alert. The FTC explains you can contact TransUnion, Experian or Equifax. You only have to choose one of the three bureaus because it will share your information with the other two.

2

Visit the credit bureau's website for the most current contact information. Each credit bureau has a fraud page that lists a toll-free line exclusively for victims.

3

Call the selected credit bureau and ask it to place a fraud alert on your credit report. This initial alert will remain in place with all three bureaus for a minimum of 90 days. Be prepared to prove your identity by giving your Social Security number and other personal information.

4

Report your situation to the police. You will need an official identity theft report if you wish to extend the fraud alerts beyond the initial 90 days. The FTC explains this document proves you are a victim.

5

Call each of three credit bureaus and request a fraud alert extension. They will require you to provide a copy of your identity theft report. The extended alert will stay on your credit reports for seven years. It drops off automatically at the end of that time frame.

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Does a Tax Garnishment Affect Your Credit Score Even If It Is the Tax Department's Fault?

A tax garnishment affects your consumer credit scores whether it is accurate or inaccurate. Reported as a potentially negative item, a tax garnishment can cause your credit scores to drop drastically. However, it is almost impossible to say to what extent. State and federal governments can garnish wages or benefits checks.

Effects

Whenever a state or federal tax garnishment is recorded on your consumer credit report, your credit scores drop. Because no two credit histories are alike, there is no way to state equivocally how much improvement removing the garnishment will have on your consumer credit scores. One thing is certain, though: Having a tax garnishment recorded on your consumer credit report makes it difficult for you to obtain new lines of credit, and may increase interest rates for existing lines of credit.

Consumer Credit Reports

You must contact the three major credit bureaus -- TransUnion, Experian and Equifax -- directly to remove an erroneous tax garnishment from your credit reports. State tax boards do not determine the length of time public information is documented on a consumer credit report. Your complaint must be writing and contain supporting documentation, such as garnishment release.

Public Record

When a tax garnishment is created, the county recorder's office receives notice. It is important to remove a tax garnishment from public record as well as your credit reports. Contact your state tax board and ask an agent to send a notice to the applicable county recorder's office stating that the tax garnishment is incorrect. The county recorder's office will promptly update the public record.

Statute of Limitations

If the statute of limitations runs out, the garnishment releases automatically. By this time, you've suffered the damage to your credit score and have no further recourse. In the future, check your consumer credit reports annually. You are entitled to receive one free annual credit report from each of the three major credit bureaus through the AnnualCreditReport.com website (see Resources). You are not, however, entitled to receive your credit scores for free.

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UK Credit Scoring Criteria

When assessing an application for credit, individual lenders have their own criteria on which they rate borrowers. But they also rely on the information held on your credit file by credit bureaus--known as credit reference agencies in the United Kingdom--that compile information about an individual's borrowing behavior. These agencies collect personal data from various sources including the electoral roll and court records. All this information form part of the criteria for assessing your creditworthiness.

The Electoral Roll

When you applying for credit, U.K. credit agencies such as Experian and Equifax check the electoral roll for the name and address you have provided to the lender. The electoral register, which is compiled by local authorities, holds accurate details about a registered individual. Accordingly, being on the electoral roll confirms to the lender that you are no longer a minor since you must be 18 or older to vote in the United Kingdom. If you are not found on the electoral roll or if there are any discrepancies, you may be turned down and your credit score will suffer.

County Court Judgments

When a creditor takes you to court because you have failed to repay your debt, you may have a county court judgment (CCJ) passed against you. This is when a judge orders you to repay the money you owe to the creditor within a certain amount of time. Failing to follow the order will result in your CCJ being recorded on the Register of County Court Judgments for six years. This record shows up every time a lender conducts a credit search; having one means you have a bad history of borrowing. Avoid having a CCJ registered against you by repaying your debt within one month of the judgment.

Previous Borrowing

Although lenders depend on the response they receive from the credit bureau, they also assess you according to their definition of the perfect customer. Some may see you as the perfect opportunity to make money, while others may not find too high a risk. So while one lender may turn you down, another may still accept you. However, making multiply credit applications means multiple credit searches, which harm your credit score as each search is recorded on your file.

Credit History

British creditors prefer to lend money to someone with a high credit score and a good credit record. But having no records on your credit file will not necessarily or automatically make your credit score high. In the same way that lenders are reluctant to lend to someone with too much credit, they also refrain from giving credit to someone no credit history at all as they can't be sure of the person's creditworthiness.

Income and Employment Status

Although the details of your earnings and employment status are not registered on your credit file, the information often used by lenders to determine whether you can repay the amount you are asking to borrow. Being in full-time, permanent employment and earning a relatively good income may be an added bonus on your application as it assures the lender that you are not likely to struggle to pay off your debt.

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How to Obtain a New Credit Score

The Fair Issac Corp. is responsible for the FICO credit scoring model. This model is used by credit bureaus to calculate a person's creditworthiness based on a numerical equation. There are numerous ways to obtain a new credit score. The Fair Issac Corp. maintains a website that distributes credit scores, the credit bureaus will distribute credit scores to customers and credit monitoring services offer free credit scores to customers who purchase other services.

Instructions

1

Order a credit score directly from MyFICO. MyFICO is the official website for the Fair Issac Corp. Customers can obtain a credit score from either TransUnion or Equifax, but not Experian. To purchase a credit score based on either report, myFico will charge $15.95, or order credit scores based on reports from both bureaus for $31.90 (prices as of 2010). The FICO score from either or both reports will be viewable online after payment is processed.

2

Get a new credit score directly from the credit bureau. The three credit bureausExperian, Equifax and TransUnionwill each provide a customer with a credit score based on the customer's credit report with that particular bureau. Experian charges $14.95 for a credit score and report. Equifax charges $15.95 for a credit score and credit report. In order to get a TransUnion credit score, customers must also purchase credit monitoring service for $14.95 per month. Credit scores will be viewable online after purchase is complete.

3

Obtain a free credit score when you purchase services from a credit monitoring company. A credit monitoring service is supposed to notify a customer of any unusual activity on her credit report. There are many credit monitoring services available. All three credit bureaus offer a credit monitoring service, as do other popular services such as FreeCreditReport and FreeCreditScore. Each of these services charges a monthly fee that varies but is typically not more than $20 per month (as of 2010). Credit scores may be viewed online after a customer purchases services or accepts a trial offer.

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How to Clean up Your Credit in Five Easy Steps

Cleaning up your credit history may seem like a demanding task that requires great effort. True, you can't undo a bad credit history overnight, but in five simple steps, you can improve your credit score measurably and prove that you're able to manage credit. Never underestimate the significance of a good rating, especially if you are buying a home or car.

Instructions

1

Keep track of the information on your credit report. Don't rely on creditors to report correct information to the credit bureaus. Order your credit report once a year to confirm that they report valid information. Dispute inaccurate statements.

2

Remember to pay bills on time to avoid late fees and negative remarks which can impact your credit rating. Don't wait until the last minute to forward payments. This increases the risk of the payment arriving late.

3

Slash your debt. Gradually pay off your credit card balances to clean up your credit score. Mail in higher payments and do not put new charges on your cards.

4

Make a deal with creditors to clean up your report. Ask your creditors to reduce your minimum monthly payments if you are experiencing payment problems, and establish a plan to pay charge-offs or old delinquent accounts to help fix your credit.

5

Start over if you've been through bankruptcy. Living without credit after a bankruptcy makes it difficult to improve a bad credit score. Start fresh with a secured credit card (available from your bank) and rebuild your credit history.

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Does Marriage Wipe Out Credit History?

Couples face many financial changes when they get married. They might join their checking and savings accounts and make large purchases together. While a couple's finances join after marriage, their credit scores do not. Since credit scores depend on an individual's credit history, that rating does not change simply because the individual says, "I do." Marriage is not a get-out-of-jail-free card for bad credit.

Credit Score

When a married couple makes a purchase together, whether it's a house or a car, their lender will check the credit of both spouses. If the husband has a poor credit score and the wife has a high one, he cannot use her credit score when making a purchase. The lender will take into account both credit scores when determining whether the couple will receive a loan.

Impact of Bad Credit History

A bad credit history can lead to credit problems in a marriage. If both spouses suffer from bad credit scores, they might struggle to make common early marriage purchases, such as a home. This inability to start their lives on the right foot can lead to stress in the marriage. If one spouse suffers from the bad credit of the other spouse, this can often lead to resentment, as the spouse with good credit effectively marries into a bad financial situation.

Ways to Wipe Out Bad Credit

Although marriage is not a way to wipe out a bad credit history, there are other methods couples can use to improve one or both credit scores. The most immediate way to improve credit is to start paying bills on time and, if possible, paying more than the minimum amount to reduce debt quickly. Time also heals bad credit scores, so if the couple has the funds to stay up-to-date on bill payments, they will watch as they credit scores steadily increase.

Credit Risks in Marriage

In a marriage where one spouse has a lower credit score, the couple might be better off keeping their credit cards separate. For example, if the husband with good credit adds his wife with bad credit as an authorized user on his credit card, then he assumes her credit history and any poor credit decisions she makes using the card. The husband can keep his credit score high, which is particularly important when his wife's score is low, by keeping their credit cards separate.

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What Is the Transunion State Security Freeze?

TransUnion offers a service called State Security Freeze, in which you can place a freeze on your credit report. This means that no one can access your credit file or obtain credit in your name, until you remove the credit freeze.

Creditors & Security Freeze

When you enact a TransUnion State Security Freeze, creditors can not pull your credit report. If they try to access your credit, it will be blank. Creditors can not view your credit report until you remove the credit freeze. This will also mean that you cannot open any new accounts.

Purpose of the Security Freeze

You may enact a security freeze for whatever reason, but commonly it's used because identity theft is suspected. By placing a security freeze on your credit report, you can stop anyone from assessing your credit without your permission. No one will be able to obtain credit in your name while the security freeze is enacted.

Cost of the Security Freeze

Depending on which state you live in and why you are enacting a security freeze, you may have to pay a few dollars to enact a security freeze against your credit. Check the Security Freeze Fee Table to determine what the fee will be in your state. If you have proof of identity theft, you may be able to enact a security freeze for free.

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How to Get a Copy of My Credit Score

Obtaining a copy of your credit score will help determine where you stand among the credit scoring range from 450-850, with 450 being poor and 850 being excellent. Checking your credit scores regularly may also alert you to any major changes within your credit report, such as new accounts, delinquent payments, high credit card balances and other activities that impact scores. The following basic steps show how to get your credit scores.

Instructions

How to Get a Copy of My Credit Score

1

Go online and research companies offering credit reports with credit scores included. You can go to the websites of the three credit bureaus, Experian, Equifax and TransUnion, or you can approach a company that merges the three reports and scores in one file.

2

Pay for the scored credit reports using your credit card. Make sure the site is secure with an "https://" prefix to the website.

3

Purchase your scored report and download or print immediately.

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Can Business Credit Card Debt Impact Personal Credit?

As an employee, a corporate credit card lets you avoid entangling business expenses required by your employer and personal expenses, but it can still affect your credit rating. In general, business credit cards usually have a negligible effect on your personal credit rating. However, even if your employer is responsible for paying your business credit card debt, an unpaid bill can cause damage to your credit rating.

Business Credit Card Basics

Most likely, you have to apply for a business credit card jointly with your company. An initial inquiry can cause up to 5 points in damage, but the credit card provider may or may not report the payment history to the credit reporting bureaus. American Express, the largest provider of business credit card lines to Fortune 500 companies in the U.S., does not report account history to the credit bureaus. Other lenders, such as the issuers of MasterCard or Visa, may report history to the bureaus. Positive payments improve your credit rating, but late payments damage your score even if the company guarantees the bill, if the creditor reports the account's monthly payment history to the credit bureaus, according to Ismat Sarah Mangla on the CNNMoney website.

Exception

Your credit card provider may have special policies on your account. For example, American Express reports delinquent debt to the credit bureaus if the account is 180 days or more late, regardless of who is supposed to pay the bill. The only way to know for sure what happens is to review your employer's credit card policy and that of the lender.

Prevention

Review your credit history via AnnualCreditReport.com and look for the corporate account to determine conclusively if it affects your credit. You and your employer should receive a bill from the credit card provider. Confirm with the company's accounting department that the company pays the bill by the due date. File an expense report as soon as possible with the company's accountant so that your employer can approve the expenses and pay the bill as soon as possible, suggests Janna Herron of Bankrate.com.

Considerations

Know what expenses your company will pay. If you make personal charges on the account, the company may not pay them. You might want to pay the bill during a dispute with the company to prevent it from affecting your credit rating. If the company was supposed to pay the bill and was late with the payment, ask the employer for a letter explaining the incident, send it to the credit bureaus and they probably will remove the negative item from your record.

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