Keeping Good Credit

Keeping your credit positive and strong involves six steps:

• Pay your bills on time and as agreed.  This will have the greatest impact on both your credit reports and scores.
• Keep the proportion of the credit you use low compared with credit limits.  This applies to credit and charge cards as well as lines of credit.  Try to use 20 percent or less of your limit.  This means that if you have a $1,000 limit, never charge more than $200 on your card.
• Don’t apply for credit you do not need.  Applying for too much credit at once can be an indication of someone in need of money.  This can impact both your credit report and score.  While the affect on your scores is fairly small, it can make a difference when you apply for credit.
• Avoid any entries in the public records section.  Be sure to respond to any threats to sue by creditor.  If you have been served with a lawsuit notice and don’t show up to court, the court will likely find in favor of the individual or business that is suing you. Also, pay your taxes and child support to avoid new entries.
• Check your credit report at least one time per year.  Go to annualcreditreport.com for your free, annual credit report from each of the three credit-reporting agencies—Equifax, Experian, and TransUnion.  If there are errors or accounts opened fraudulently in your name, you will have the information quickly and be able to get errors or the effects of identity theft corrected.  Consider getting one report every four months.  For example, go to annualcreditreport.com in January and get your Equifax report; in May order your Experian report; and in September your TransUnion report.  This will help you monitor your credit report on a regular basis.
• Keep good records.  Good recordkeeping will provide you with proof of errors on your credit report; information if you identity is stolen; and peace of mind.

Recording keeping systems can be simple. Use one of the following systems to keep track of all of your bills and payments.

• Get folder or large envelope for each month. Label each folder or envelope with the month and the year. Put all of your bills, receipts, and statements in that envelope.  Put them in safe place.
• Get folder or large envelope for each bill that you pay.  Label each folder or envelope with the name and contact information for each creditor. Each month, sort your bills, receipts, and statements into the appropriate bill or envelope.
• Use an online system.  This could be your bank or credit union's online banking system. Be sure to maintain security by having a complicated password that you change regularly.  Also, never access your bank information on a public computer or WiFi network.