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Get REAL: Managing Credit

January 28, 2010

Marlene Ware

Welcome to Real Economic Impact’s Get REAL (Reliable Experts, Answers & Lessons) series: reliable advice re: your economic concerns from leading money, legal, and financial experts from around the country.

This week’s Get REAL expert is Marlene Ware, Financial Literacy Advisor for the National Foundation for Debt Management

Q: Why is it important for individuals with disabilities, parents and family members, teachers, support coordinators, and rehabilitation counselors to know more about managing credit?

A: Whether we like it or not credit is an established part of American life. Credit reporting of one form or another has been around since 1956. It can be a valuable tool, giving employers, insurance agencies, and future creditors information about you that may lead to a low interest mortgage, auto loan or credit card rate. It can also lower your insurance rates and get you that promotion you are seeking.

But the consequences of negative credit are typically a reduction in the likelihood that you will be approved for a mortgage or credit card. You may be destined to pay the predatory rates at the “Buy Here-Pay Here” auto lots and may not be granted a lease on an apartment.

Keeping your finances running smoothly is simple when you know about the possible detours that lie ahead. There are many danger signs as you work to build credit but if you spot them early you can avoid the bumps in the road that may delay your financial journey.

Q: What are the three most important points an individual needs to have a basic understanding of managing credit?

A: #1 You need to know what your credit report looks like. If possible creditors, employers, insurance agents, and anyone else with a reason can look at you report – you need to know what they know. You can’t fix it if you haven’t seen it. You can get your free your report here. But never pay for your report – everyone can receive a copy of each report (there are 3 of them) every year.

#2 You want to have a spending plan – a budget. The best way to “up” your credit score is to manage your money. Paying your bills on time is the number one way to increase your score. The higher your score the more secure you will be financially.

#3 You must be running your financial life like a business. You want to consider yourself to be the chief financial officer in charge of all the financial decisions that will affect you and your family. Don’t leave it up to chance. Watch your statements. Call your creditors if you are going to be late on a payment. The more involved you are with your own money management, the more successful you will be.

Our Get REAL blog series welcomes your questions. Simply e-mail us at


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