The best time to establish good credit is when you have no credit. Before you sign up for your first credit card or loan, make a promise to yourself that will do the following:
- If you have no established credit history, open a low cost checking or saving account and make regular deposits. Use credit cards carefully and pay them off each month
- Keep a minimal number of credit cards
- Keep credit card balances low, under 50% of your credit limit per card
- Do not apply for a new credit card because you are at the maximum limit on the old one(s)
- Pay your bills on time
- Make at least the minimum required payment and pay down the balance when you can
- Know your debt to income ratio and keep it to 20% or less of your take home pay
If you have a credit score that you wish to improve, it may take some time, but rest assured that it will go up if you do the following:
- Have a budget and stick to it
- Reduce or eliminate unnecessary installment payments like cable and new cars that may keep you from living off of your take-home pay
- Make minimum payments on time
- Understand that bankruptcy and foreclosure will stay on your credit record for up to 7 to10 years
- Get help from a reputable, free, credit counselor.
- Fix errors on your credit report
For a free look at your credit score go to www.annualcreditreport.com