With today’s lending guidelines you need to be mindful of your credit score. This can be a crucial element in any major purchase such as buying a home, a car, or getting a personal loan. Below are a few great tips you can use to improve your credit rating.

1. Check Your Credit Report – Your credit begins here, all of the important information is recorded on your credit report. You are entitled to a free report each calendar year and there are many websites you can visit to see your report. Remember that there are 3 agencies, Equifax, Experian and Transunion. The road to perfect credit begins with you knowing what’s on your credit report.


2. Reduce your debt- Reducing the amount of outstanding debt DOES have an impact on your credit. When you are “Maxed out” it reduces your score and you are less likely to qualify for a loan.


3. Pay your bills on time- This seems easy enough but MANY Americans still do not follow this rule. Set up payment reminders or auto bill pay. Your bank can assist with auto bill pay and so can your service providers. Contact them directly and set up electronic payments to be deducted from your bank account each month and you will avoid late charges which show up on your credit report.


4. Keep credit card balances low- Easier said than done right? Each month you only make a minimum payment on your credit cards you are accruing finance charges which make it harder to catch up each month. Keep your balances low, and if you have a balance try to pay it off as soon as possible and avoid using your credit cards unless it’s absolutely necessary. Bankrate.com has a great page with steps to paying off your credit cards : http://www.bankrate.com/brm/news/dollardiva/20010702a.asp


5. Apply for and open new credit accounts only as needed- Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score according to Experian.com.


6. If you usually pay your debts on time, but a missed payment ended up on your credit, ask the creditor for a good-will deletion.- If you are usually on time the lender will often remove the damage.


7. Tell the credit reporting company, in writing, what information is inaccurate- Your letter should clearly identify each item in your report that you want to dispute, state the facts and explain why you dispute the information, and request that the information be deleted or corrected. You may want to enclose a copy of your report with the items in question circled. Send your letter by certified mail, return receipt requested, so you can document what the credit reporting company received. Keep copies of your dispute letter and enclosures. They will usually reply to you within 30 days.


8. Develop a budget- This can help you improve your credit because when you know how much cash flow is coming in and out of your household monthly you will be less likely to over-spend.


9. If you have really bad credit - even filed bankruptcy -- don't let your credit status go dormant- The faster you can start establishing good credit again the better. Make it a habit to pay on time!


10. Protect your identity-  Mind where you are storing your personal information, shred important documents such as bank statements, bills or anything that someone can your information from. Be sure you are not just throwing away the credit card applications companies send to you because someone may be able to retrieve them from places like your garbage and being using your identity! Keep your credit safe by protecting yourself from identity theft. There are also several companies out there that will watch and alert you of suspicious activities.