Staying clear of credit trouble will help you save money and give you the relief of knowing that you have good credit. Don't let setbacks deter you, because you can be free of bad credit. Even if you have collection items currently affecting your credit score, there is action that you can follow to stay clear of credit trouble in the future. Ordering a copy of your credit report and checking it periodically can help you stay informed of your credit status.
Credit Cards
Don't be enticed by credit card offers that seem too good to be true. Credit card debt is one of the biggest causes of credit trouble for consumers. If you already have credit cards, use them wisely and avoid using your cards to purchase expensive luxury items like televisions or electronics. Be patient and save for luxury items, or hold off on buying them altogether until you can afford to buy them without using your credit cards. If you have to use your credit card, it should be for emergencies, such as car or home repairs.
Bill Payments
Pay your bills on time. Paying bills late will harm your credit rating. In some cases, if you build good relationships with your creditors and a circumstance causes you to pay a bill late, they will give you time to pay without reporting it as a late payment on your credit report. If you know that you will be paying a bill late, call your creditor and request an extension; negotiate for additional time, without it affecting your credit status. Contacting your creditors directly can also keep your account from being referred to a collection agency and affecting your credit score.
Review Report
Order an updated copy of your credit report and credit score. Checking the status of your credit report periodically is the best way to stay informed of what items may be affecting your credit. If there are any items that are incorrect and are damaging your credit score, dispute them with the reporting agencies. For example, if you are divorced and a credit item belonging to your ex-spouse appears on your report, you may dispute this charge as not being yours. The credit bureau will research your dispute by contacting the creditor of the credit item that you are disputing and verifying whether or not the item is yours. If their research indicates that the credit item does not belong to you, the negative item will be removed from your credit report.
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