Good credit is important because it helps you qualify for a loan at the best possible interest rate. But if you have debt as a result of managing your arthritis and you feel that your credit is not as good as it should be, try not to feel overwhelmed. This section provides some suggestions that may help.

I'm not sure if I have good credit or not. How can I find out?

Order a copy of your credit report from one of the agencies listed below. If there are any errors on the report, you have the right to get them corrected at no cost to you, and the creditor must notify the other major credit-reporting agencies of the error so they can correct their information. If the agency will not change the report, it must permit you to include your side of the disputed situation.

• Equifax: 800-685-1111 
• Experian: 888-397-3742
• Trans Union: 800-916-8800

How can I build good credit?

Take the following steps to build good credit:

1. Pay basic expenses, such as rent and utilities, on time.
    
2. Make loan payments on time.
    
3. If you can't pay on time, telephone the creditor and explain the problem. Do not ignore the payment.
    
4. Pay loans before you spend money on other purchases.
    
5. Only apply for the credit you need. If you apply too often, lenders may be concerned that you are using too much credit.
    
6. Do not bounce checks. 
    
7. To establish good credit, use a credit card and pay it off every month or at least keep the balance very low. 

I am "head over heels" in debt. What can I do?

Consider these suggestions:

• If you are in debt to a few businesses, call them and try to negotiate for smaller payments-at least for a while. Call them before you miss a payment. It may be hard to make these telephone calls, but most creditors will be understanding and will want to work out a plan that fits your needs as well as theirs.
   
• If you owe money to many businesses, it may be time for outside help. Consider working with a nonprofit debt counseling service, such as Consumer Credit Counseling Service (CCCS). These types of services can help you set up a repayment plan. Call 800-388-2227 or visit the National Foundation for Credit Counseling Web site at www.nfcc.org. 
  
• If you have balances on several credit cards, try to pay off the ones with the highest interest rates first. If you can't pay off the whole balance, at least pay more than the minimum every month to reduce interest charges. 
   
• Keep only one credit card for emergencies. Consider getting credit disability insurance on that card, which will make minimum payments on your balance if you are disabled. Be aware that the definition of disability on these cards is fairly restrictive and may include a pre-existing condition exclusion clause. Cut up the other cards, throw them away and call the company to close your account. 
   
• Consider bankruptcy only as a last alternative. If you declare bankruptcy, have a house foreclosed or a car repossessed, it will have a major effect on your ability to get new credit for several years. If you find yourself in this situation, call a lawyer or legal aid clinic before taking any action.

©2001. National Endowment for Financial Education. All rights reserved.

Note: Certain content areas in this material are current as of the publishing, but legislative and regulatory changes as well as new developments may date this material over time. This content is meant to provide general financial information; it is not meant to be a substitute for or to supersede specific professional or legal advice.