1.) Learn everything there is to know about credit and what is on a credit report. This knowledge will help you keep a good financial history and know more about keeping a high credit score. Also, when you pull your credit report you will not be frustrated because you will understand what everything means.
2.) Pay bills on time before they are due. This looks great on a credit report. Not only does it keep the account current, but it raises your credit score. Future lenders will see this as positive aspect in your payment history.
3.) Use Credit Cards. Having a credit record is much better than not having any record. If you do not have any records on your credit report, future creditors will not know what type of borrower you are. As long as you keep a current balance on revolving accounts, use credit cards! Many credit cards even have rewards for using them such as frequent flyer miles or rebates.
4.) Have a large range of credit types. Lenders want to see that you are applying for different types of credit rather than only credit cards or only loans. It shows them that you can pay back all kinds of debt rather than just a small credit card bill or a student loan. If you have an auto loan, a mortgage, two credit cards, and a student loan and they are all current then you are a
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responsible debtor.
5.) Keep balances low. Always running your credit cards up to the limit looks very irresponsible, especially if you are only paying off the minimum balance each month. The best way to handle revolving accounts or any other type of debt is to keep the balances low and pay as you go.
6.) Do not apply for too much credit. Every time you apply for any type of credit, it shows up on your credit report for two years! This is called an inquiry, and affects you negatively. When lenders see that you are applying for credit all over town it looks dangerous to them. It could mean one of two things: you are being denied repeatedly or you are on a serious spending spree. Try to keep the inquiries down to a minimum, because lenders check that out on your report and definitely want to see only a few.
7.) Refinance!! If for some reason you had a low credit score when you applied for a home, auto or any other type of loan, then you probably have an extremely high interest rate. The best thing to do if your credit score has increased is to refinance for a better rate or term. It may not seem like the best idea short term, but it can save you tons of money and increase your credit score in the long term.
8.) Learn how to deal with collection agencies. A lot of people think that collection agencies are allowed to harass them, but this is not so. Do not listen to what they say because the damage is already done to your credit score, and they are only trying to scare you into paying the debt. However, an unpaid collection account looks worse on your credit report than a paid collection account! If you find yourself in a bad situation with a collector, then you should know your rights. There are laws to protect consumers against the harassment of collectors, and you can report them to the Better Business Bureau.
9.) Remember when your receive a medical bill with a deductible or a charge that you feel is the insurance companies responsibility you need to pay the bill and then fight with the insurance over whose responsibility it was, because if you don’t the medical provider will send you to collections if you go too long without paying the bill and then you will have a collection on your credit report that will cause your score to go down. Just remember it is always easier to fight with the insurance company than try to remove a collection from your credit report.
10.) Always pay the balance off rather than the minimum payment each month. If you have a high balance and are paying the minimum every month, you will just be paying double the amount in interest! The best thing to do is to pay off large chunks of the balance or even the full amount each month. If you make small charges and pay them as you go and use cash more often, then it will look the best on your credit report.
11.) Online Bill Pay. If you know that you have trouble staying organized, choose online bill payment. It is automatic and will make your life a lot easier, as well as keep your bill current. Also, if you are going out of town you should enroll in online bill pay to make sure that your bills are still being paid on time while you are gone.
12.) Talk to lenders and creditors. Ask them waive the late fees and payments, some of them would be happy to do it and not have it show on your credit
13.) Start building credit early. When you are a student, you can apply for great student cards, or even have your parents start building credit in your name. Just make sure that the balance is paid off in full and has no late payments. Some young people go on spending sprees because they do not understand credit – do not become one of those people! Another good way to build credit is student loans. A lot of people do not pay their student loans and they become negative accounts, so it is important to pay them off to build the credit.
14.) Watch out for identity theft. In today’s day and age, there are many bad people out there just waiting to steal someone’s identity so it is important to keep all your personal documents secure. Always know where your wallet or purse is, and never give your social security or credit card information to anyone that you do not trust. There are also companies out there to protect people from identity theft, which is a great asset to consumers.
15.) Don’t make excuses or put it your financial situation on hold. There is no excuse or reason to put off a poor credit score. If you think that it is not important, you may want to think again. A good financial background is one of the most important things when trying to buy a home, an automobile, student loans, regular loans, credit cards, or any other type of funds! Not only does a good credit score affect you financially, but it can affect you when trying to find employment, insurance, or even a place to rent.
16.) Check your credit reports regularly. Once a year, you are entitled to a free credit report from www.annualcreditreport.com, but you can check it more than once a year if you’d like. It is very important to keep track of your credit report to make sure that no one has stolen your identity, and your information is being reported accurately. Also, it shows responsibility to check your credit report on a regular basis and always know that you will be able to receive credit in the future.
17.) Dispute inaccurate information on your credit report. If you see that on your credit report that there is inaccurate, misleading, or unverifiable information, then you should take it up with the credit reporting companies. This inaccurate information will affect your credit score more than you would believe!
18.) Learn to budget and live within your means. This is the most important thing that anyone can do, without a budget it is easy to overspend. The most important thing is rent, utilities, auto, and food, any- thing else is just extra. Try to cut out the things in your life that you cannot afford to avoid future debt, such as eating out or lavish shopping.
19.) Don’t move around a lot or change jobs frequently. All of this information shows on your credit report, and shows instability. Creditors want to see that someone is responsible and going to be in the same place for a long time – financially. Moving and changing jobs shows that you are unstable, and reflects on your status as a borrower. 20.) Always be aware of your general financial status as a borrower. Not only is this your responsibility, but it is your job! If you do not keep track of your credit score, then you may not be able to receive credit in the future due to identity theft or inaccurate information on your credit report. Start today!
