Improve your credit

If your credit report is less than squeaky clean, don't despair. Regardless of how creditors may make you feel, it is not a judgment on you as a person, but simply a report on how you've handled your credit related financial obligations. You will need to take a few active steps to set the record straight for the future.

• Pay your bills on time. Many creditors will consider lending to someone with some late payments, if recent records show that you've mended your ways. However, apart from extreme circumstances like bankruptcy or tax liens, nothing has a greater negative impact than late payments. The due date for a payment is when it has to be in the hands of the creditor, not postmarked. Anything more than 30 days late will hurt your credit standing, often seriously. Never let a payment of any kind get 90 days past due. Keep in mind that one day past the due date is considered 30 days late.

• When it comes to the number of credit cards you should have, fewer credit cards is generally better. Having a few clean, active charge accounts will boost your score.

• Minimize your outstanding debt. Even if your debt is relatively small and your monthly payments are manageable, having outstanding debt is always a negative factor. Try to pay down your existing debt as quickly as possible within your budget limitations.

• Time is sometimes your best ally. Although you may have late payments or other derogatory information on your credit report, the more time you can put between such negative information and a better record of on-time payments and low debt, the more favorable your credit profile will appear in the eyes of lenders. Although negative information can stay on your credit report between seven and ten years, every month that passes where you exhibit responsible credit behavior is a positive step toward improving your credit.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.