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Got Credit?

Here's what you really have to know about your credit.

This story appears in the December 2002 issue of

If you've managed to survive the last two years in a downtrodden economy, chances are you might not have gotten off scot-free. You might have added a few wrinkles to your credit history by making late payments to credit cards or vendors. So how do you go about fixing your credit score when it comes time to seek financing, get a loan or even open new accounts with vendors?

Most homebased business owners' credit is tied to their personal credit, says Mari Gottdiener, a credit report specialist, credit counselor and founder of Outsource Solutions, a credit counseling business. Your first step should be to get a copy of your credit report and see what your current score is. Credit scores are used to predict the risk that a consumer will default on a loan, and are calculated on a scale of 300 to 900, with anything over 620 considered acceptable. Most scores fall within the 500- to 800-point range, according to Gottdiener. "Credit scoring itself takes into account two things; the first is a consumer's past history in terms of account payment history, amount of accounts open and timeliness of payments. The second is a current snapshot of financial obligations," she says.

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