Perhaps the most valuable suggestion for improving your credit file, and consequently your credit risk score, is to act responsibly. Know your financial limitations. Understand how your monthly income relates to your monthly bills and debts. Don't spend out of your bounds.
Once it's in your record, the only true way to eliminate negative credit information from your file is the passage of time. Information in your credit history will only be changed if it is inaccurate or if the seven (or 10) year reporting period has elapsed. In some cases, adverse information may be reported without reference to these periods.

If you have a history of bad credit, there are a number of things you can do to start rebuilding a positive credit file:

• First, know what's on your credit report. If you have been denied credit, you have the right to request a free credit report (see also Your Credit Rights). Or, for a reasonable fee you can conveniently order your consolidated report from Confidential Credit, which includes information from all three national bureaus. Take the time to understand not only what's on your report, but why you have been denied credit.

• Check for mistakes on your credit report. Be sure to examine your files from all three bureaus, as the information may not be the same on each one. If you find errors, take steps to dispute the information in order to remove it from your file.

• If you are having difficulty paying your bills, develop a plan now. Make a list of everyone you owe and how much you owe. Contact your creditors and discuss payment options. Begin now to catch up with late payments. These efforts will show you are earnest in meeting your obligations.

• Look for ways you can consolidate bills. You might be able to do a balance transfer to another credit card with a lower interest rate and also eliminate three or four other credit card accounts you currently have.

• Identify ways you can decrease your spending and increase your income. Ask a friend or family member to help you come up with a realistic budget that will help you catch up with late payments.

• Finally, don't use credit again until you are on more solid footing. You may want to cancel-;or just hide-;your credit cards until you are in a financial position to use them responsibly again.

If you are just starting out on your own, perhaps after a divorce or just out of college, you'll want to begin establishing a positive credit file. This will play an important role in determining your future creditworthiness and in ensuring that you have a good credit score when it comes to evaluating your file for a mortgage or other type of loan. If you have little or no prior credit history, consider these tips:

• Limit the number of accounts you have. Resist the temptation to sign up for every credit card you can. Find a revolving credit card that has a reasonable credit limit ($300 maximum) and stay within your budget.
• Pay your bills on time. Every month, your creditors release information to the credit bureaus. Make sure your creditors are reporting only positive information about your bill-paying history.
• Ask a family member to help you get credit. If you have little or no credit history, you may need the assistance of someone with an established and positive credit record to co-sign a loan for you. However, if you do this, be sure you are responsible in making all your loan payments on time.

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