Credit Matters- your credit report

I should have known something was up with my friend Brenda when she called me first thing in the morning. In the 15 years, I have known her, she has never called me before noon. I should have known this call meant there was a crisis.

The crisis, I learned, was a result of two things--the fact that, the week before, she had found the home of her dreams, and the fact that, last night she had found out her chances of getting a mortgage to buy even with her less than perfect credit rating.

Unfortunately, Brenda's credit history prevented from being able to purchase her dream house. Unfortunately, like so many people, Sandra didn't pay too much attention to how much credit matters--not the subject in general, or how it affected her specifically--until she found out just how important it was to maintain a good credit history.

The house Brenda wanted was affordable and beautiful, and losing it produced this single, but very specific piece of advice from her to all people considering buying a home: Get a copy of your credit report. Now! Not only is it cheap, process is supereasy.

Even if you aren't in the housing market, here are a couple of things that might move you to action. First, your credit report affects all kinds of decisions about you, including if you can get insurance, an apartment, or if you are offered a job. Second, by law you have the right to correct any erroneous information in your file.

But what if the information in your credit report isn't wrong? What if, like loads of folks, you earn a decent income, but you're deep in debt? What if you are like 60% of the population and have some type of negative credit information in your credit history? Is there hope for a someone whose credit rating is poor do to past mistakes?

Yes, absolutely. But first the bad news. Only two things can improve a bad credit rating--time and re-established credit. Nobody --no company, no organization, no association--can remove negative information from your report if it's timely and accurate.

The good news is, not only can bad credit be improved, you don't need a credit repair company to do it. You can be your own debt doctor. There are all kinds of excellent, free education campaigns that are dying to show you how. To get closer to her dream of homeownership, for example, Sandra is using the Fannie Mae Foundation's guide, Knowing and Understanding Your Credit. (To order online, log on to www.homebuyingguide.org, or call 1-800-611-9566.)

The National Endowment for Financial Education is another great resource for people seeking high-quality, unbiased personal finance information they can immediately apply to their lives. (To learn more, log on at www.nefe.org.)

As Brenda found out, our knowledge can become our strength. We just have to be willing to take the first steps toward obtaining it.