It is a well known concept that a person with no credit or bad credit will struggle tremendously, not only in their financial life, but also in their emotional life.

It is my belief that everyone, no matter how financially irresponsible they have been in the past, everyone deserves to have good credit. Good credit not only allows people to obtain the things they want and need, but also grants them a peace of mind and tranquility that not only serves to preserve their finances, but also brings harmony and stability to their home.

I have heard many advices and secrets on how to build, better, and maintain an individual's credit. Some I have discarded -because they are just too idealistic or bottom line, not doable- but some I have kept and have actually used them to help family members and friends with their credit. There is nothing anyone else can do to "fix" your credit that you cannot do yourself. Of course, a lot of patience and time is needed for this process, and seriously, if you don't have any of these, then do consider going to a professional; they do know a lot about this subject, since this is how they make a living after all. But, if you are willing to take control over your own credit, then following are some of the things I consider helpful to do:

HOW TO ESTABLISH NEW CREDIT (IF YOU DO NOT HAVE A CREDIT RECORD AT ALL):

- Start with store's revolving credit. These are store's credit cards (Macy's, JC Penney, Sears is a bit harder to get, an so on...), which are easier to get than normal credit cards. Their interest rates are very high. Once you do get approved, then make sure not to have balances greater than half your credit limit. For example, Macy's approved you to carry one of their credit cards, your credit limit is $300.00 (it could even be $100.00, at the beginning do not expect to get huge credit limits, remember, you are starting to build your credit, you have no history, and the creditors, of course, do not want to take a big chance on you, but if they do, they will surely charge you high interest rates) try to not owe, at any time, any more than $150.00. Ideally, you should be able to pay off your balance at the end of the month (or beginning, whenever the bill is due), again, this is the ideal thing to do -wipe out balances at the end of the month.

- Another thing to do is to get secured credit cards -those in which you actually send the bank a deposit, which acts as their security in case you default/not pay. Check out this website: http://www.bankrate.com/brm/news/cc/19990823.asp make sure to read pages 1 and 2. You can also download this bulletin from the FTC: click here to download. Make sure that the company you are considering reports to the credit bureaus, so that your credit history starts to build. The more informed you are, the better. Of course, if you have any questions, you can also e-mail me.

- Once some time passes by after you have successfully worked out the two steps described above, then you can think about getting better deals based on your credit history and worthiness. It is sad, but our credit worthiness is based on your credit scores, and I say "scores" because we all have three credit scores, each from a different credit bureau: Experian, TransUnion, and Equifax. For a mortgage we usually base our decisions in your middle score (high score is 699, middle score is 649, lower score is 632, we use 649). Once at least a year has passed and you have made EVERY payment on time, not exceeded your credit limit (ideally, never exceeded 1/2 of your credit limit), then you should go to annualcreditreport.com and check your credit with all three credit bureaus. Your reports are free (once a year), but your score is not. Make sure to also get all three scores (the fee is minimal with each credit bureau). The scores will give you a better idea of how you are doing. Minimum is 400, and best score is 850. Median score is around 720.

TO KEEP A GOOD CREDIT HISTORY:

- NEVER PAY LATE, A LATE PAYMENT STAYS ON YOUR CREDIT REPORT, AND THAT IS SEEN AS DEROGATORY HISTORY. EVEN WORSE IS A LATE MORTGAGE PAYMENT. WHEN PRESSED FOR MONEY, FIRST PAY YOUR MORTGAGE (LOANS WITH COLLATERAL), THEN YOUR CREDIT CARDS. 

- TRY TO OWE LESS THAN 1/2 OF YOUR CREDIT LIMIT. IDEALLY, YOU SHOULD BE ABLE TO WIPE OUT BALANCES WHEN THE BILL IS DUE.

- DON'T REQUEST CREDIT OFTEN. DO NOT GIVE YOUR SOCIAL SECURITY NUMBER TO COMPANIES TO ALLOW THEM TO CHECK YOUR CREDIT UNLESS YOU ARE APPLYING FOR A MORTGAGE, OR A CREDIT CARD WITH REALLY GOOD TERMS/CONDITIONS, OR CAR LOAN. TOO LITTLE CREDIT CAN BE A BAD THING ON YOUR CREDIT BECAUSE YOU WILL NOT BE ABLE TO SHOW HISTORY, BUT TOO MUCH CREDIT CAN BE AS DANGEROUS, BECAUSE IT IT SEEN AS IF YOU NEED CREDIT TO GET BY.

- UNLESS YOU ACTUALLY HAVE THE MONEY (OR WILL BE ABLE TO PAY OFF THAT CREDIT CARD BILL WHEN DUE) TO PAY FOR THAT WATCH, OR THAT PRETTY DRESS, DON'T BUY IT, YOU WILL REGRET IT LATER, AND PAY FOR IT OVER AND OVER AND OVER IN INTEREST CHARGES. OF COURSE, WE DO NEED CREDIT FOR A MORTGAGE AND A CAR LOAN, THOSE ARE DIFFERENT INVESTMENTS.

I DO HAVE MANY OTHER THOUGHTS ABOUT THIS ISSUE, PLEASE,CHECK BACK FREQUENTLY!