1. Put down the card! Unless you really will pay that credit card purchase off before the next statement, don’t use it!
2. Send in the payment. Pay all of your bills on time and if you cannot, contact the creditor to make arrangements. Avoid having debts sent to collections.
3. SAVE for big purchases rather than using credit. If you know your washing machine is on its last legs, start saving! $100 a month for a few months and you can buy a great (machine, stove, lawnmower, drill, etc.) item without using credit and you’ll pay no interest!
4. A variation on #3, rather than open new credit to purchase a big item, use existing your existing credit lines. Numerous open lines of credit can actually hurt your credit.
5. Check your credit report at least one time a year and dispute any inaccurate items. Here are some things to look for that impact your score:
• Negative items such as late payments, collections, or accounts marked as “charged off” that aren’t yours.
• Credit limits reported as lower than they actually are. (Your credit score may be lower if it looks like you are using more than 30% of your available credit limit.)
• Accounts listed as “settled,” “settled as agreed,” or anything other than “current” or “paid as agreed” if you paid on time and in full.
• Accounts that are still listed as unpaid that were included in a bankruptcy.
• Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.
6. Dispute old collection accounts. This may work for collection accounts that are older and smaller amounts. Make your dispute through the credit bureaus, not the collection agency. When selecting the dispute reason, use the option for “not mine.”
7. Talk to your creditor. (Am I repeating myself (see #2)?) If negative items are being reported correctly on your credit report, see if the creditor is willing to re-age the account. This means they will show the account as current rather than behind. Usually you have to make a minimum number of payments on time or be enrolled in a debt management plan to receive this benefit.
8. Vary the type of credit you use. A mix is good. This means having credit cards and using installment loans such as auto or personal loans.
9. Bill pay! If you need help paying your bills on time, consider using your banks online bill pay feature. You set-up the accounts you want paid, and then deposit your paychecks. The bank writes the checks and sends them out so they’ll reach your creditors on time, every time!
10. Finally, have a chat with a credit counselor. They know the tips and tricks to help you get your credit back on track. In addition, if a debt management plan could help you with consolidated payments, reduced interest rates and fewer late fees, the only way to access one is through a certified credit counseling agency.