How To Improve Your Credit Score and Maintain It!

This site is dedicated to providing free online credit counseling to help our visitors understand their credit and how to improve it. We are committed to delivering the best credit tips and information related to your FICO score. This site, while bare-bones right now, will continue to evolve and become a clearing-house for everything you ever wanted to know about your credit score and how to improve it. Don't let bad credit hold you back!

Top 10 Tips to Improve Your Credit Rating and FICO Score

1. Avoid applying for credit cards in an effort to merely increase your amount of available credit.

2. Keep informed of your credit rating by checking it often – it has been proven that over 60% of credit reports contain serious errors. You have to ensure that it is current and accurate and it is your responsibility to do so. Clearly a less than perfect credit score can adversely affect your credit card interest rates or even your ability to be approved for a mortgage or loans at all!

3. If you have a temporary setback and as a result are having difficulty keeping up with bills (either from illness or reduction of income), be certain you do not ignore your creditors. Obviously your bills will not just disappear and your credit will go into a downward spiral in very short order. The best strategy is to contact them before they contact you — be proactive. Most companies will appreciate that circumstances sometimes occur that are beyond people's control and will generally work with you to ensure your credit rating is kept in good standing.

4. For those with a very short or very poor credit history, you should open new credit accounts and be certain to pay your bills on time. This will make it look considerably better to prospective lenders should you have only one or two bad accounts among many good ones versus having just a couple of accounts — all of them with bad histories. IF you have no history, a lender will often be able to provide you with either a secured credit card or bank loan. This involves paying up front for the amount of 'credit' you desire. E.g. If you want a credit card with $500 available credit, you simply give the bank $500 as a deposit against it. Pay your loan or credit card balance off regularly and on time and you may well qualify for an unsecured loan upon completing term of the secured one.

5. If your accounts have an unpaid balance over 60 days, you must be aware that this will be reflected on your credit report. If for some reason you are unable to make a payment one month, make certain you take care of the full amount on the following!

6. Often a letter to the credit reporting agencies can help if you find you are running into financial difficulties. Explain the situation and they will add it to your file which will help you in the future when applying for credit as late or missed payments for just cause are definitely seen in a more favorable light than an unexplained delinquency.

7. If you have checked your credit report and discovered outstanding balances, contact the creditor or their representative and make arrangements for payment. If a collection agency is involved, this can often be done for pennies on the dollar! Ensure that whomever you are dealing with guarantees in writing that your debt will be considered paid upon your completion of payment on your arrangement. Demand a letter be sent to the credit agency absolving you of your debt and ask for a copy of that letter personally when you make your final payment.

8. Don't take cash advances on your credit cards! Though these are provided as a “convenience” by the major credit card companies (and they even provide lower interest rates on them!(, you will soon discover they are not very convenient at all when they negatively affect your credit rating, which they most certainly do. Credit agencies assume if you have to take a cash advance on your credit card, you are in dire straits and will definintely look down their noses at this practice

9. Never use one source of credit to pay another! This strategy, employed by thousands, has been the source of thousands of bankruptcies. Just don’t do it! The only time when this is a viable strategy is when you are transferring and consolodating balances from high interest credit cards to a low interest line of credit at a bank. If you do this however, ensure you don't cancel your credit cards, as this also counts against your FICO score (ridiculous I know... but they take the length of time since credit accounts have been established and how long they have been maintained into consideration when generating your score).

10. Make these top 10 credit tips work for you — always pay cash if you can! Air miles, cash back or other incentives will do you no good when you are applying for a loan or mortgage and get rejected because your debt to income ratio is too high, decreasing your desirability to lenders! The only time these programs pay off is when you completely pay the entire balance of your credit cards every month. I do this myself and have received a free trip anywhere in the world every year for the past three. It's great if you have the discipline to do it -- most people don't. One credit card issuer that actually helps with this is American Express. Their charge cards are required to be paid in full at the end of every month and if you don't the interest is crippling. This is a very good incentive to pay it off!

We hope you've benefited from these top ten tips for fixing your credit and wish you the best of luck in applying them!

Manage Your Credit

Transunion and Equifax are both credit agencies that for a low cost, will provide you with online reports on exactly what your credit profile is and will definitely help you manage your credit. Check them out today!