The Path to Better Credit

Bad credit cannot be repaired, but credit can be rebuilt over time. The National Center for Financial Education, a nonprofit organization in San Diego, recommends that people trying to improve their credit take the following steps:

* Open a savings account and make steady deposits. Lenders look for people who have enough discipline to save.

* Open a checking account, but never overdraw it. Checks returned for insufficient funds can show up on credit reports.

* Obtain a secured credit card, preferably through a credit union, where fees and rates tend to be lower than at banks. A secured credit card is backed by collateral, such as a savings account.

* Get a copy of your credit report. If it does not include accounts in which you have a good payment record, ask the credit bureau to include them.

* Make sure the credit report reflects your side of the story on disputed items. Federal law allows consumers to place on a credit report their side of payment disputes, arising from such problems as returned merchandise or shoddy work by contractors.

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How to Get Help

+ If you are having problems paying your bills, the nonprofit Consumer Credit Counseling Service offers free assistance. Also, for a minimal fee, the organization will negotiate with creditors and devise a debt repayment schedule. It will help obtain new credit for those who successfully complete the repayment program.

* Call (213 386-7601 in Los Angeles County, (714) 544-8880 in Orange County, (619) 224-2922 in San Diego County and (805) 644-1500 in Ventura County.

+ The National Center for Financial Education sells a $10 do-it-yourself credit improvement guide. The guide is available by writing to the center at Post Office Box 34070, San Diego, Calif. 92163. California residents must include sales tax.