Military Officer - November 2008 - (Page 57)

2008 ﬁnancialguidebook repay. If you are considering cosigning a loan application for someone, remember you are undertaking a ﬁnancial obligation. Be sure you can repay the debt if the borrower does not pay back the loan. Your inability to take over the other person’s payments can have a negative impact on your credit rating, so consider it carefully. Incorrect credit bureau information Unfortunately, the information reported by credit reporting agencies is not always accurate. There are cases in which individuals have good credit, but a credit bureau reports incorrect information for one reason or another. Mistakes can occur, and many people don’t ﬁnd out until they have been denied credit, so it is a good idea to review your reported history regularly. If you have been denied credit based on information from a credit report, the lender must provide you with the name and address of the reporting agency so you can request a free copy of the information. If the agency’s records are incorrect, notify the agency immediately so the correction can be made. However, each bureau is different, and correcting one report does not correct the others. If you are denied credit, you are entitled to a free report. You also can obtain a free credit report once every 12 months from each of the three major credit reporting agencies by visiting www.annualcreditreport.com. MO Finally, lenders measure credit worthiness in very precise ways, and they are required by law, under the Equal Credit Opportunity Act, to apply the same standards to all loan applicants regardless of race, color, religion, national origin, sex, marital status, or age. You also are to be given equal consideration if you receive any income from public assistance programs or if you’ve exercised your rights under the Consumer Credit Protection Act. Building a good credit history A positive credit history will remain one of your most important moneymanagement tools. Every individual who borrows has a record with at least one of the many credit bureaus in the U.S. Credit bureau information is stored and updated depending on your credit activity. Maintaining a good credit history will help you attain credit in the future. Late payments, loans charged off because of nonpayment, and bankruptcy remain on your credit history for seven years (as many as 10 years in cases of bankruptcy). Even missing an occasional payment in tough economic times might show up on a credit report. These blemishes could hurt you when you’re applying for a new car loan, a mortgage, or even employment. If you have the ability to repay a loan, but your credit history isn’t strong enough or you don’t qualify for the amount you are requesting, a guarantor (also called a cosigner or comaker) might be able to help. A guarantor is a creditworthy individual, such as a relative or friend, with an established positive credit history who assumes responsibility for the loan obligation in the event you cannot repay it. Your guarantor supplies his or her income, employment, and debt information to the ﬁnancial institution giving the loan and must be willing and have the ability to repay the loan if you fail to do so. However, a guarantor cannot offset poor credit history or your inability to AVOIDING BAD CREDIT The most important steps to avoid bad credit might be the simplest. First, always pay your bills on time — if possible, a few days early. Late payments might appear on your report and will remain there seven years. If you tend to forget or procrastinate, set aside two days a month to pay every bill or set up automatic bill paying online, so the payment for recurring bills automatically is taken out of your bank account each month. In addition, do not lend your credit card to anyone and always keep your credit cards in a safe place. Treat your cards like cash so charges will not be made without your approval. NOVEMBER 2008 IMAGES: ABOVE, SHUTTERSTOCK; PREVIOUS SPREAD, IMAGE SOURCE/CORBIS MILITARY OFFICER 57 http://www.annualcreditreport.com

Table of Contents Feed for the Digital Edition of Military Officer - November 2008

Military Officer - November 2008 Contents From the Editor From the President Your Views MOAA Directory Rapid Fire Washington Scene Chapters in Action Financial Forum Ask the Doctor Financial Guidebook Out of the Red 7 Year-End Tax Strategies Cover Story: Memory Survives Something to Say MOAA Scholarship Recipients Pages of History Faces of MOAA Information Exchange Member Books Advertising Index MOAA Member Services MOAA Calendar Sounding Taps Encore

Military Officer - November 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.