Your credit report represents how well you manage your financial
responsibilities. The good news is that your negative information drops off over
time but the positive information remains. Building a strong and consistent
history of responsibly using credit is the foundation to building a great credit
profile. Although it’s relatively easy to gain access to new credit such as
credit cards, there are many best practices to use and common traps to avoid.
Here are a few easy tips for effectively building your credit history.

Applying for new credit
  • Don’t apply every time you see an offer. Getting too much credit too quickly
    can hurt your credit profile.
  • Don’t build your credit profile through trial and error. Consult an expert
    such as a credit coach to develop a plan based on your short- and long-term
  • Print clearly when applying for credit. If your application information is
    entered inaccurately it can create variations of reported information on your
    credit report.
  • Consistently use your complete name without any variations. Providing
    complete, accurate and consistent identification on your credit applications
    helps set up your credit history correctly from the beginning. It also minimizes
    the chance that your credit file will be incomplete or mixed with another
    consumer’s file.
Once you have credit
  • Pay your bills on time. Most lenders look at the most recent information on
    a report. So if you’ve paid your accounts on time for the last two to three
    years, the lender may weigh that more heavily than a series of late payments
    from five years ago.
  • Set up a budget, and follow it. This is so much easier said than done! A
    credit coach can help provide you guidance on creating and managing a budget
    based on current income and debt as well as your short- and long-term credit
    needs. In the age of self-help and empowerment, managing your finances should
    top your list. The key is not to over-extend yourself.
  • Develop and follow a plan for the type of credit you have, how you use it,
    and the type of credit you may need in the near future.
  • Review your credit report periodically throughout
    each year.

    • At least 60 to 90 days before making a major purchase (such as a home, car
      or large household goods) you should prepare by reviewing your credit profile to
      help ensure it is optimized.
    • Continual evaluation of your credit profile is necessary to ensure you are
      not paying unnecessary interest expenses (i.e., you could qualify for lower
      rates and better terms). The average homeowners spend an estimated $300,000 in
      their lifetimes on unnecessary interest expenses.
    • Ensure no fraudulent or erroneous activity has occurred related to credit
      profile. An estimated one in eleven families was a victim of identity theft last
Getting help

A personal credit coach can be incredibly valuable whether you understand
credit or not. Having a credit coach is similar to an asset manager except it’s
for your liabilities. A coach will work closely with you to explain your credit
profile, provide you guidance with ways you can more effectively manage it, and
can help you evaluate it on an ongoing basis. Changes continually occur for all
of us. Jobs change, unforeseen expenses happen and so on. If you begin to fall
behind on your payments.

  • Contact your lenders. Ignoring the situation will only add to your problems.
    Many lenders will work with you to set up a different payment schedule or
    interest rate. It never hurts to ask.
  • Pay your bills when they’re due. If you have an overdue bill, unpaid debt,
    tax lien or judgment, pay it off. You may find it easier to pay one affordable
    consolidation loan rather than several separate accounts. Your credit coach can
    help identify what options may be available to you.
  • Stop using credit, if possible, until your finances are under control.
    Consider going to cash purchases only based on your budget. This will STOP the
    financial bleeding while you pull your credit management plan back into place.
  • Look to professionals like the ApprovalGUARD Service. Your credit coach is
    experienced in explaining your credit and indentifying ways to optimize and
    manage debt.
  • AVOID credit repair agencies. “If it’s too good to be true then it often
    is!” Most credit repair agencies typically charge you high prices to
    artificially “fix” your credit. This unfortunately often amounts to “band aid”
    work that manipulates loopholes in the system and often results in the credit
    issue returning to your credit report within months after it was supposedly
    fixed. If you have inaccurate information on your report, your ApprovalGUARD
    credit coach can help you identify it and specifically provide you with the
    proper methods for getting it addressed.