This may sound like an oxymoron but using credit correctly can increase your income, or disposable income. Most people think that the more credit you have the more debt you carry. This couldn't be further from the truth, because having bad credit will increase debt, good credit can increase your disposable income.

Let's first understand what is meant by good and bad credit. Bad credit does not mean you are late on your payment, or defaulted on some obligation. It simply means that your credit rating is such that you have high interest rates and fees if you are late on a payment. Good credit on the other hand means having low interest rates, and credit that enhances your credit rating; this means no department store credit cards.

Because most of us really don't know what helps or hurt our credit, we feel that the more credit cards you have the better your credit will be. But it is not a matter of the number of credit cards, but the type of cards. These may include department store credit cards, or high interest credit which actually affects credit rating negatively.

But the type of credit cards you have is not the only things that affect your credit, inaccurate information has the most negative effect on our credit. Some getting a credit report and going over it with a fine tooth comb can increase your credit ratings instantly. One of the best places to get a free credit report once a year is http://www.freeanualreport.com; this site give you access to the three credit bureaus for a free copy of your credit report.

Once you have your report in hand, you have to know what to do to improve your credit rating and one site that gives away free credit restoration tools is http://www.hureonconsulting.com. These tools will teach you how to turn negative credit into good credit, which will help increase your disposable income. Because, a simple thing like lowering your interest rates on the credit cards you already have can save you hundreds if not thousands per year.

Now just imagine that instead of spending that savings, you put it into an interest bearing account. Now instead of giving away that money, you are having it grow for you, and this was simply accomplished by lowering your interest rate. Credit if used correctly and wisely could be a source of generating income, but the temptation to just use it because we have it has to be overcome.

So to sum up what was stated above, just having credit is a bad thing if is used unwisely, but using it to grow your income is the best use for it in these economic times. Using the available free tools listed above can give you an edge up on how to correctly use your available credit to your benefit. But before we can do this we must first understand what credit is, and then how to make it work for us, because believe me the credit companies already have.