A credit bureau is a private record keeping business that maintains information about consumers and how they use credit to pay their bills. This information is then sold for a fee to businesses that inquire about a consumer's credit-worthiness. Many stores, credit card companies, and banks send information to credit bureaus regularly. Information on bankruptcies and court judgments is also added to records. Unfavorable information is kept on record for seven years, and bankruptcies remain for ten years.

A credit rating, credit history, or credit record is a detailed report on an individual's credit use. Developing and keeping a good credit rating is very important. In only seconds, creditors can use the report to decide whether you qualify for a loan or credit card, and landlords, employers, and insurers can base an offer for an apartment or job or a policy on the information. Potential employers may legally request your credit record if you apply for a job paying $20,000 or more a year. A good rating may also help you get credit at a lower cost.

The credit bureau supplies information to each creditor but does not give or deny credit. When a potential lender inquires about your credit history, you are evaluated on current debts, record of tax liens, and judgments plus your past history of promptness in paying bills incurred with credit.

Creditors must determine if you are financially able to repay the debt you are about to incur. Each creditor has its own criteria for determining credit worthiness. The credit grantor combines the information from the credit bureau with the information you supply on the credit application concerning income, savings and checking accounts, and home ownership. How long you have lived at the same address and how long you have worked at your present job are also considered.

Sometimes creditors use a scoring system to rate various characteristics to determine your credit-worthiness. Because this is often done by computer, it is very important that your credit report be accurate.

Often the item being financed (such as a car or appliance) helps determine whether you qualify, because the item is used as security and can be repossessed if you default on the loan. Creditors are cautious when someone has too many credit cards; a consumer could potentially charge them all to the maximum. Too many applications (called inquiries) for credit listed on your report in a short period of time are also cause for concern.

When you apply for credit

• You have the right to an equal opportunity to get credit.

• It is up to you to prove to the lender that you are a good credit risk.

• If you are denied credit for which you have applied, you have a right to know why.

Young, single women are able to obtain credit on an equal basis with men. But many women who become widowed, separated, or divorced may find it difficult to obtain credit in their own name if credit has not previously been established. The Equal Credit Opportunity Act bans credit discrimination on several grounds, such as age, sex, and marital status.

Creditors may still deny credit if the applicant:

• has no credit history.

• does not have an adequate source of income.

• has excessive financial obligations.

• has foreclosures, bankruptcies, liens, or lawsuits in their recent past.

• Even if you are happily married, you should have at least one major credit card in your own name to establish your financial identity.

• Use your legal name. Mrs. Robert Jones is a social title. Nancy Lynn Jones is your legal name.

• If you are widowed, your card issuer may ask you to reapply in your own name and can deny credit if you do not meet qualifications. If you can show that you were an authorized user or were responsible for the bills, this may be evidence of a personal credit history.

• If you are anticipating divorce, close all joint accounts to avoid having possible negatives from your future ex-husband reported in your name. If this is not possible, remove your name from all joint accounts. To establish your financial identity, open accounts in your own name.

• Before your divorce is final, communicate with your future ex-husband and decide which debt belongs to whom, then ask each company and bank that extended you credit to transfer the debt to the name of the person who will be responsible.

• If you take your maiden name after divorce, ask your creditors to change your married name to your maiden name on your accounts.

• Request an oil company credit card; they are not usually difficult to get. Then pay it off promptly each month.

• Pay off student loans on time.

• Open a checking account in your name. Don't go below the minimum balance and don't bounce any checks. This will show that you can manage your finances.

• Open a savings account in your name and make systematic deposits.

• Open a secured credit card account if you cannot obtain a regular card.

• Obtain a small loan from your bank or credit union and pay it back promptly or ahead of time. Check first to learn if the business reports transactions to a credit bureau; not all do.

• Apply for a credit card at a local store or bank