Establishing good credit is essential in today’s consumer environment.  It is most critical when considering the purchase of a home and acquiring a mortgage.

5 Key Steps to Managing Your Credit

• Make your payments on time!

o   A late payment affects your credit quickly!

• · Don’t max out your credit card – try to keep the balance at 50% or less.

o Its best to have a few cards at a half balance than 1 card maxed out

§ This rule is particularly true when you are shopping for a home loan

• · Don’t close ANY OLD credit cards!

o You will loose your “start” date and never get it back.  The longer you have a card open the better it is for your credit score.

• · Do NOT open Store credit cards (i.e. A department store or music store)

o However, if you already have some open – DO NOT CLOSE THEM EITHER – just keep them active and paid on time!

• · Keep your credit open & active.  For the cards you do have – use them every 3 months – allow them to send you a statement and then pay if off!

o It does you no good to use it and then pay it off online when you get home – you need the credit company to report the use to the bureaus and this happens every 30 days (when you get your statement).

• · Check your credit report every 3 to 6 months to prevent identity theft.

o Try http://www.annualcreditreport.com

• · Do not pay for your credit score – too many inquires done yourself will bring your score down!

Key Steps to Repairing Your Credit

Much like managing your credit well – repairing your credit requires the same rules.  If you are shopping for a home loan and your score is too low here are some key steps to heal your credit.

• · Start making ALL your payments ON TIME no matter what!

o Your credit score can heal itself every 30 days

• · Start to consolidate your debt by paying off the high interest cards first while maintaining monthly    payments on the other cards.
• · DO NOT OPEN any new lines of credit at all.

o When shopping for a home loan you could ruin your credit score and debt to income ratio with too many lines of credit.

• · DO NOT use a “credit repair” company