Pay your bills on time
Once you’ve reviewed your credit report and ensured that the information is correct, the next step is to make sure you pay every one of your bills on time. Paying your bills on time is the most important thing you can do to build good credit. Even if you can only afford to pay the minimum, make sure you send the payment in on time. Creditors want to see a history of on-time bill payment. The longer you pay your bills on time, the more your credit score will go up… and that translates directly into making you a better credit risk to potential lenders. It may take some time for you to see the impact of on-time payments on your credit score, but be patient. It will happen and it is worth the effort.

Rethink how and when you use credit cards
If you have several credit cards, try to pay off as many as possible and then cut them up so you won’t continue using them. Think carefully before closing the accounts though. Closing too many accounts at once could actually hurt your credit score because the closure may increase the percentage of your available credit limit you’ve used.

Limit your cards and balances
. Instead, the best strategy is to limit the number of cards you use and keep your outstanding balances to about 30 to 50% of your total available credit. For example, if your credit limit is $3,000 do not maintain a balance of more than $1,000-$1,500.

Your spending habits
Track your monthly spending and develop a realistic plan to help guide how you manage your money. Review it regularly to reinforce your new spending habits.

Beware of credit repair companies

There are many companies that promise to repair your credit for a fee. Many of them are dishonest, charging huge fees for services that you could easily do yourself for free. Some companies may suggest bankruptcy to clear your debts, but that might be very bad advice for you since a bankruptcy will stay on your record for up to 10 years. Other companies promote the services as being from a nonprofit organization, but they steer you to a for-profit arm of the company and charge you steep fees. Instead of working with credit repair companies, seek assistance from reputable nonprofit credit counselors.

Work with a reputable credit counseling organization
If you need professional assistance to help improve your credit, there are nonprofit, community-based credit counseling organizations that provide one-on-one assistance. Don’t confuse expensive credit-repair clinics with legitimate nonprofit credit counseling organizations.

What to look for
A reputable credit counseling organization should be approved by EOUST (Executive Office for U.S. Trustees) which is part of the U.S. Department of Justice and offers a range of services from helping consumers to pay off debt and avoid bankruptcy to guidance in designing a spending and savings plan or buying a first home.

Get an explanation first. Before working with an organization, ask for an explanation of the programs and types of services offered to assist you. The Federal Trade Commission (FTC) suggests asking some pertinent questions to find the counseling service that best meets your needs. Some of the questions you should consider include:
• What are your fees? Are there set-up and/or monthly fees?
• How are your employees paid? Do the employees or the organization benefit if I sign up for certain services, pay a fee or make a contribution to your organization?
• What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained?

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