Advice on Improving Credit Ratings

Your credit history tracks how well you've maintained your adult financial life and can help determine whether or not you can get a new car, a new home and---in some cases---a new job. Whether you've faltered and need to improve your credit score, or you feel like you need to keep better tabs on your credit, paying attention to the details is one of the most important steps you can take.

Payment History

Paying your bills late is often one of the biggest contributors to low credit scores. When you receive your bills, particularly utility bills, credit card statements and loans---personal, auto or student---put the bills in a prominent place where you will remember to pay them. Set yourself up a reminder system to pay those bills in a timely fashion. You can set up your email or cell phone to receive reminders about due dates. Or you can set up your bank account so that it automatically pays certain bills on certain dates. Make sure, though, that you have enough money to cover the bills when they get paid.

Debt Management

Reduce your overall debt. Keep your credit card balances low and try and reduce yourself to only one or two credit cards. If you are working to establish credit, make one of your cards a gas card, so that you can't use it to overspend. When you are working to pay off debt, don't move the balance around a lot to take advantage of a better rate. It's better to pay off each debt in full on it's own, rather than consolidate it into one large debt.

New Credit

Don't apply for accounts you don't need. Just because the department store you visited offers you 10 percent off your purchase for applying for a new card, that doesn't mean it's a good deal. Be careful of how many accounts you apply for. Your credit score can actually drop if you apply for too many cards within a short period of time.

Monitor Your Credit

Look at your credit reports often. Make sure you get a copy of all three (Experian, Equifax and TransUnion) of your reports. If you have made a lot of changes recently, you may want to look at it as often as once a month. Otherwise, once every three or four months is probably sufficient. Make sure that accounts you are paying on are reporting your good credit and take note of anything negative. Try and make arrangements to rectify anything negative as soon as you can. If you have trouble negotiating an arrangement on an account you've had trouble paying, you may want to consult an attorney or a non-profit consumer credit counseling service.