In a time when money is not used quite as much and the termsplastic, charge and loan are common, it is important for people toestablish and maintain good credit records.

“It’s important because there are things you want in life andyou’re not going to be able to pay cash for everything, so goodcredit allows you to borrow (money) at preferred rates,” saidMartha Wilbert, a local bank assistant vice president with 26 yearsof experience.

A person’s ability to pay off debts in a responsible and timelymatter, known as credit history, is looked at closely by lenders.Anyone’s credit history can be judged by their credit rating, whichshows any loan transactions

HOW TO ESTABLISH GOOD CREDIT

According to local lenders, good credit can be achieved bypracticing responsible spending and budgeting methods.

The largest group of people who often do not know how toestablish good credit is young people, who have lived under theprotection of their parents most of their lives, said lenders.

“Kids don’t realize how important it is to have good credit,”said Sue Fleming, a local loan officer with 12 yearsexperience.

Young people, as well as other age groups, can gain experiencerepaying money by opening a savings or checking account at a bankand borrowing against that money.

Another way a loan can be obtained to learn good repaymentskills is by applying for a co-signed loan, which allows a relativewith an established credit rating to help out, said Coney Lea, thesenior vice president of a local bank.

Credit cards, if used properly, can also be of some assistancewhen establishing a good credit rating.

“One credit card with a small limit where they keep theirbalance managed is a good idea,” said Melanie Smith, a local loanofficer with 10 years experience.

Parents can help their children establish credit by eitherco-signing a loan or allowing them only a minimum amount of creditcard use.

The most important aspect of establishing good credit isrepaying debts on time. As this is done, it becomes a basis for agood credit rating.

“Those 30-day late payments will ruin someone’s credit,” saidFleming. “So many people think they can just wait a month, then paytwo months.”

This can be easily avoided by not charging more than can becomfortably afforded, according to local lenders.

“Good credit doesn’t just happen, it’s something you have towork at and plan for,” said Wilbert.

Many people do not understand that late payments can affecttheir credit for years to come, thus it is vital that all paymentsare made before or on the scheduled day to show responsiblespending and borrowing habits.

Lenders advise young people especially to start on the road togood credit near the end of high school or even during college,since it takes a few years to develop a good credit rating.

This way their credit can be established by the time they’reready to borrow money for luxuries, such as automobiles and livingquarters.

“All your credit is important, but the first credit you have ismost important because how you handle small credit will determinehow much you can borrow in the future,” said Bill Sones, who has 29years experience in the banking business.

HOW TO MAINTAIN GOOD CREDIT

Once a good credit rating has been established, it is extremelyimportant for that rating to continue or get even better. This canbe accomplished by following the same basic steps used to establishgood credit.

The rules of thumb for maintaining a good credit rating are toconsistently make payments on time, not borrow more than can beafforded, only borrow when necessary and not borrow from manydifferent sources.

“If you’re heavily in debt, it’s not going to leave you room forthe necessities, such as food, medical, utilities,” said Smith.

If a person faces a hardship and has difficulty repaying debts,they should not just stop making payments to lenders. Instead, aphone call or letter of explanation is suggested to let the lenderhelp remedy the situation.

“There are a lot of things lenders can do in working with you toavoid any problems,” said Lea, who has 18 years experience infinancing.

A person may obtain their credit history by contacting a creditbureau by phone, mail or Internet.