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Your Credit

Credit is a tricky topic and you’ll get lots of conflicting advice from friends and family about how to maintain a good rating or improve a mediocre to bad one. Here are some basic tools and common sense to help:

Pay on time
This seems elementary, but it is really the foundation of all good credit ratings. So make that payment, even if it means only making minimum payment. Consolidate if necessary (see our Debt Consolidation section for advice). And as a last resort, if because of some emergency, you absolutely cannot make a payment on time, don’t dodge your creditor(s); it’s the WORST thing you can do. Call them in advance, discuss your situation with them and work out a payment plan.

Keep old credit accounts
You always hear the old advice about getting rid of credit cards. Ironically, getting rid of old credit accounts can damage, rather than help, your credit score. Having accounts in good standing for an extend time lends an appearance of stability to your credit. Having open and unused credit cards actually helps your credit scores by helping control the overall utilization of revolving debt (basically the ratio of credit used to credit lent is low because you have open credit on multiple accounts; however, multiple cards that are maxed out will not help you). Once those cards are closed they can no longer help you. The utilization on your remaining open credit card accounts, assuming you use them, may spike and caused your scores to plummet.
  
Check you credit score often
It is usually recommended that you check your credit every six months. But you should check your credit AT LEAST once a year, especially given that you can do it for free. The Fair and Accurate Credit Transactions Act entitles you to one free credit report (not your credit score) every 12 months from each of the consumer credit reporting companies. Your free credit report can be obtained through the following website: www.annualcreditreport.com

Alternatively, you may contact the credit reporting agencies individually.

Equifax, Inc.
P.O. Box 740241
Atlanta, GA 30374
(800) 685-1111
www.equifax.com
Experian
National Consumer Assistance
P.O. Box 2104
Allen, TX 75013-2104
(888) 397-3742
www.experian.com
Trans Union LLC
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
(800) 888-4213
www.transunion.com