Four Easy Steps to Credit Health

By Scott Budman and Kevin Cuneo
|  Monday, Nov 9, 2009  |  Updated 10:30 AM PDT
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Four Easy Steps to Credit Health

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Get your credit back on track

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As the country deals with its deepest recession in decades, millions of Americans are dealing with credit card debt.

If you're one of the many who are in red, you know that the more you owe, the more your credit score goes down. And while digging yourself out of piles of debt may seem impossible, it can be done.

Here's NBC Bay Area Four Steps for repairing your credit as fast as possible.

STEP ONE - FIND OUT WHERE YOU STAND
Get a credit report and make sure the information is correct. You're entitled to a free credit report every. Make sure you get one that's actually free, like at annualcreditreport.com

STEP TWO - MANAGE YOUR CREDIT CARDS
Experts say it's good to have a variety of credit but not too much credit. You should only have two or three credit cards. Close the accounts that you are not using. It's best to keep your older accounts, that will show a longer history of credit.

STEP THREE - LOOK AT THE LAST TWO YEARS
When it comes to fixing your credit, it's the more recent activity that counts. Take care of unpaid taxes, leans, and collections first. Experts say that most creditors or landlords will most heavily weigh the last two years on your credit report.

STEP FOUR - BUILD NEW CREDIT
Open up a secured credit card. Secured cards are backed by money you deposit into an account. About half of the nation's credit unions offer them. And remember, time heals all wounds and credit reports as well. The worst things you can have on your credit report are foreclosures and bankruptcies, those will take about seven years to repair.

You can talk to credit counseling services for more information.

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