In today’s marketplace, maintaining good credit is vital not only for the purpose of buying a home or a car, but many companies are now utilizing credit scores to determine what type of person you truly are. Some insurance agencies are using credit scores to decide what your rate will be; rental agencies also determine rent amounts and whether or not to rent based on credit reports, even your prospective employer may be checking your credit rating before they hire you!

Monitor Your Credit Report
To keep your credit in good standing, there are obvious steps such as paying bills on time and in full, holding minimal balances on your credit cards and accounts, and having the appropriate amount of debt for your income level. But did you know that monitoring your credit reports and activity is equally important? This is especially true if you already have negative credit. Often times there are errors and/or fraudulent activity due to either someone making a mistake or even identity theft. Many individuals don’t know they’ve been hit until it is too late. The sooner fraud or mistakes are detected, the easier it typically is to clean it up. Watching your credit report for erroneous activities enables you to put a stop to them before they get out of hand.

Focusing on your credit report doesn’t need to be a time-consuming process. There are many companies out there offering monitoring services with various pricing levels and options, giving you the benefit of choosing your involvement level and notification level. You can even do it yourself by ordering your own credit report annually from each of the three organizations (TransUnion, Experian, & Equifax) directly or all-in-one through AnnualCreditReport.com

Fixing Bad Credit
We all have times when challenges arise that negatively impact our credit either through our own inabilities or at the hands of others: thus making it necessary to clean up credit ratings. Fixing credit can be a painstaking process often taking significant amounts of time and patience and a little bit of juggling.

Pay Off Collection Accounts
Outstanding debts that have gone to collections need to be paid in full but not at the expense of other current accounts. The current accounts help show a pattern of reliability which looks much better than paying off all outstanding debts only to have new ones fall into collections or behind. Setting a budget and time-frame to complete this will show a nice stable method for repayment on your credit record. Also try negotiating a settlement amount with a lump sum payment if you can come up with one. Many companies will settle and mark the item as paid for slightly less than the full amount.

Co-Signers
If you are lucky enough to have a friend or family member who will co-sign on a loan, you may be able to improve your credit. With the right person, you will be able to get a better rate and potentially borrow more than on your own, illustrating improvement on your report.

Refinance Existing Accounts
Refinancing of loans and negotiating lower rates with your issuing bank(s) is a great way to improve credit and put more money back into your pocket to be utilized for other things. Generally all it takes is a simple request with your issuing bank or account representative and rates can be reduced. They are often more willing to negotiate if your payments have been made in a timely manner for a number of months consecutively. Be careful when requesting refinancing through other organizations as the number of inquiries on your credit within a given timeframe can also negatively impact your score.

Keep Low Balances
When possible; keep a low balance on your revolving credit lines. Pay off as much as you are able monthly, and leave no less than 70 to 75 percent of your credit available each month. Maxing your credit cards out is rarely a good idea.

Secured Cards
A secured credit card shows your sincere intent to rebuild your credit. You do have to deposit money initially, but often after paying on time for a set period the card can be converted to an unsecured credit card. Your bank or credit union is a great place to open this type of account.