The easiest way to hurt your credit is to break any or all of the rules that are important to lenders and creditors, which we’ll go over in detail here.

- Being late with bill payments. One third of your FICO score is based on your bill-paying track record. It’s been said that a payment that’s 90 days late is just as bad as filing for bankruptcy, or a repossession. However, sometimes in life things go wrong and maybe you aren’t able to get that payment out on time.

Most lenders will work with you to a point, and they are usually willing to let an “oops” here and there go. Just try to bring the account current as soon as you can, and don’t skip payments. If you can only afford to pay the minimum, do that. It’s better than doing nothing at all!

If you know ahead of time that you won’t be able to pay on schedule, call your lender and explain your situation. Hopefully, they’ll be understanding and give you a little “wiggle room”. It doesn’t always work, but if you’ve had a history of on-time payments for years, it can go a long way.

- Spending most or all of your credit line. Just because some guy in a suit somewhere has arbitrarily decided that it would be OK to lend you thousands upon thousands of dollars, doesn’t mean that you should spend it all. Don’t overindulge and buy a bunch of stuff that you really can’t afford. Curtail your spending, because your debt-to-credit ratio counts for another 30% of your credit score. It’s a good idea to keep your debt at or below 10% of your total credit limit. Anything up to 30% is OK to the lending world, but above 50% is not so appealing to banks and lenders.

- Forgetting your past. It may seem like the right thing to do, but dismissing your credit history-even if it happened years ago- isn’t such a good idea after all. The longer your credit history, the higher your score should be. A lot of people routinely cancel old cards that they don’t really use anymore, and then they are shocked to discover that their FICO score has been damaged. The length of your history accounts for 15% of your score, and closing old accounts is detrimental to your debt-to-credit ratio, that we discussed in the last segment. If you must cancel a card or two, start with the accounts that you’ve had for the shortest time.

- Signing up for a lot of cards. Most of us receive a ton of credit card offers, and it’s tempting to sign up for one or more of them. Sometimes it makes sense to shop around, but in this case it is better to stick with what you already have. Creditors like loyal customers, and if you go around asking for loans from other companies they might get antsy. New credit apps are 10% of your score, and if lenders see that you’re making multiple applications within a short time, they’ll close their pocketbooks and your score will go down like a sinking ship.

Don’t think that borrowing money will increase your score, and don’t buy into the old myth that says you have to have a balance on your cards to prove that you have credit. Also, variety can be a good thing. Having a diverse credit portfolio constitutes 10% of your credit score. Aim for a combination of car loans, perhaps a mortgage, and some revolving debt (usually your credit cards). There’s only one problem with diversifying your portfolio- a risk that you’ll damage your credit score simply by applying for loans, as mentioned above.

As there are many ways to damage your credit score, there are only really two surefire ways to mend it. One is time. Most credit blemishes disappear from a report after seven years. The other is paying your bills on time, every time. Doing so will increase your trustworthiness with your creditors, and the responsible use of your credit will look good to any lender you may encounter in the future.

- 750 and above will get you primo interest rates on loans; you’ll essentially get approved anywhere and everywhere.

- 710 through 750 will get quite a few competitive offers sent your way, though you won’t get as many as a person with a score of 750+.

- 650 up to 710: You’ll get approved, but you won’t get the good rates that your friends with higher scores will get.

- 580-650: Prepare yourself for stricter terms and higher interest rates.

- 580 and below: Basically, if you don’t want to go through a loanshark, forget it!

There are a few ways to enhance your score. Focus on paying bills on time, and using your credit line responsibly. Paying on schedule accounts for 65% of your score, and that will bring up your reputation with future lenders. Paying late will damage your report, but only for so long. Even a payment that’s two months late will begin to go away after you’ve started catching up. A 90-day late payment (which is almost as bad as a bankruptcy!) will take longer, but will disappear eventually. Having a recent payment record that’s sparkling clean will help, too.

Keep balances lower. Use less than 35% of your credit line, and lenders will look more favorably upon you. Ideally, you’d pay off your entire balance every month, but if that can’t happen, pay as much as possible.

Expand your credit history. Don’t close all your old accounts, because that will decrease your debt-to-credit ratio. Use these cards every few months or so, to make a minor purchase that can be paid off the same month. That will give the company something to tell the credit bureaus. Also, make sure your lenders are fairly and accurately reporting your credit limits, and if they aren’t, ask them to do so. If you think you can spend responsibly, ask your bank to increase your credit limit. The only drawback to this is: A request for an increase can bring about a fresh inquiry into your credit history- which can reduce your score by five points or possibly more. Building a credit history through a home equity loan isn’t a good idea either.

Pay off any no-down-payment loans first. Now would be the time for a home equity loan, because it counts against your score less than a revolving line of credit does. Be careful, though, because if you don’t pay a home loan, the lender can foreclose on your home! Take care of all accounts that have gone into collections; but paying them off won’t bring up your score as much as you might think. The real damage to your score comes when the debt is “charged off”. Attempt to negotiate with the collector, and have them mark the account as paid, or remove it from your report.

Don’t make repeated applications for credit. Multiple inquiries into your credit history can be just as bad as a “hard inquiry”, as far as your FICO score is concerned. If you’ve done all your loan shopping within 45 days, you should be OK, but some lenders operate under a two-week timeframe. Keep track of your report, and make sure all entries are accurate. One false entry can drop your score by fifty points, or even more. Review all three major reports, as they all contain different information.

Maintaining a good score doesn’t take as much effort as fixing a dented one. Keep paying your bills on schedule, spend responsibly, and don’t mess with a good thing! Tinkering with your report too much can bring your score down.

Being on someone else’s account as a joint holder or authorized user used to be an asset to your credit report, but no more. Credit companies no longer use this information due to widespread fraud. I guess you could say a few bad apples spoiled the whole barrel.

Improving (or maintaining) your score isn’t easy, but hopefully with the tips given here, it won’t be as difficult. Good luck, and responsible spending!

Most lenders don’t report every single transaction or late payment. That’s not necessarily something you want to bring to their attention. If you’ve slipped up a few times, and have ended up paying late more than once, and it doesn’t appear on your credit history, just thank the powers that be and make every effort to pay on schedule in the future. Conversely, if your payment history is immaculate, you may want to say something if there’s something lacking on your report. Missing information can make your credit history look not-so-appealing to potential lenders. If a good portion of your accounts are missing some information, a creditor may not have enough info to decide whether or not you’re creditworthy. To flesh out your credit report, call those lenders who aren’t so good at reporting transactions, and ask them to start communicating more about your credit history. Another thing to consider: The reports you’ll receive from each of the three main credit bureaus (Experian, Trans-Union, and Equifax) will most likely contain different information. Just because there’s a blemish on one report, doesn’t mean it will appear on the others.

A dormant account may be an asset. Activating a card, then not using it, can cause the lender to “forget” to report that information to the credit bureaus. When you stop using a card, it drops to the recesses of your credit file, and that can happen anywhere from three months to a couple of years later. A hibernating account will help to clean up your report a little bit. If you seem to pay bills late, and often, a late-payment blemish will have a lower effect on your score over time. Unused cards still make up part of your total credit line, until you decide to cancel it. But, keep in mind, canceling a card can hurt your credit score. Keep an eye on those dormant accounts, to make sure you aren’t accruing fees- or worse, someone hasn’t stolen your account.

If your lender doesn’t report what your credit limit is, look at it as a blessing in disguise. Without knowing what your total limit is, other credit card companies are less likely to bombard your mailbox with those annoying (and sometimes tempting!) preapproved offers. When Capital One started reporting its customers’ highest balance, instead of reporting their credit limits, people’s credit scores went down because other lenders thought that they were closer to reaching their credit limit. As a result, the Fair Isaac Corporation no longer includes this information when they figure a person’s score. A lender’s not reporting your limit may be a good thing, if those limits are low. Other companies may see a lower limit as a sign that the banks are keeping a tight rein on your spending power. Some lenders have a company policy of not reporting credit limits, but it can never hurt to ask.

If your lender occasionally lets something slide (intentionally or not), just consider yourself fortunate. That late payment they forgot to report, or a business that claims you’ve been their customer for five years, (when it’s actually only been two)- can improve your credit score and give other lenders an overstated idea of your creditworthiness. But, don’t be surprised if the omissions catch up with you one day, and you find a few “surprises” on your next credit report.

1.) Don’t Bounce Checks
While bounced checks don’t appear directly on your credit report, every bank and potential lender has access to that information, and it could keep you from getting a home or auto loan in a snap.

2.) Pay Your Bills On Time
Although this may seem normal to some people, others have trouble staying on top of paying their bills, and their credit suffers because of it.

3.) Contact Local Lenders
If you go to a lender in the neighborhood versus a national chain, you are more likely to get a credit extension because they take the time to understand your unique situation versus putting you through a system that will automatically approve or deny you.

4.) Start Small
If you have had some credit discrepancies in the past, there is a reason they are there. Don’t get in over your head with charges you think you can pay off, because of the reality of the situation is, you can’t.

5.) Check Your Credit Report
At least once a year to make sure the information is accurate and you are identity theft free.

6.) Secured Credit
Keep it safe by applying for a secured credit card because it will help you establish some credit by having a deposit to cover the charges you make. This is a fail-safe way to prevent yourself from going too far on your spending.

7.) Apply With A Co-Signer
If you need a car and know you will never be able to get a loan, find a close friend who can trust you and ask them to be a co-signer. This will show the lender that you have someone vouching for you that you’re good for the deal.

8.) Before Getting A Loan, Check Your Credit Report
It would be very embarrassing to walk into a bank for a loan and be denied for something like identity theft or a small error on your credit report. Take care of this type of thing ahead of time and you will be 100 times more likely to get a loan.

9.) Avoid Changes in Residence
Lenders like to see someone who is stable, just like when it comes to career, this means staying put. Jumping from town to town is a red flag that you are not a reliable person.

10.) Increase Your Income
This is obviously harder than it sounds, but to get rid of debt and stay ahead of the game, you need to make more money. Try impressing your boss, or even being so bold as to ask for a raise. People aren’t going to just hand you money, you need to earn it.

1) Secured Credit Cards – This type of credit card is great for building your credit because you are required to make a cash deposit into your account to be approved. This gives the lender assurance that there is cash available to cover the card, in addition to supplying you with the perfect tool to start proving your credibility.

2) On Time Bill Pay – As this seems basic for some people, it is important to realize that if you have bad credit, anything you’re doing to repair it will be severely affected if you don’t pay your bills on time. In an extreme, the cut-off point is 30 days past due. After that, you might as well wait until the following month. Keep in mind, that most companies are willing to give you a grace period as long as you call and notify them you’ll be a few days late.

3) Applying For Credit - Don’t do it! The last thing you want to be doing while in the rebuilding process is try and establish credit before you’re prepared. If you are in the black hole of credit and you apply for credit and keep being turned down, your score will only continue to decrease as well as send a red flag to potential lenders qualifying you as a risk.

4) Maxing Out - Maxing out your credit cards lowers your score as well as sends a signal to lenders that you are a risk. The moment you exceed 50% of your limit, your credit score begins to plummet. To combat this, ask your creditor for an increase to put you back in the 50% and below and start finding a way to pay back what you owe.