Learning Center
Basic Finance
How Credit Affects You
Preparing for Home Ownership
Steps for Buying a Home
Life as a Homeowner






 
Additional Resources
Module 2
How Credit Affects You
Improving Your Credit
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Pay Your Bills on Time
Once you’ve reviewed your credit report and ensured that the information is correct, the next step is to make sure you pay every one of your bills on time. Paying your bills on time is the most important thing you can do to build good credit. Even if you can only afford to pay the minimum, make sure you send the payment in on time. Creditors want to see a history of on-time bill payment. The longer you pay your bills on time, the more your credit score will go up… and that translates directly into making you a better credit risk to potential lenders. It may take some time for you to see the impact of on-time payments on your credit score, but be patient. It will happen and it is worth the effort.

Rethink How and When You Use Credit Cards
If you have several credit cards, try to pay off as many as possible and then cut them up so you won’t continue using them. Think carefully before closing the accounts though. Closing too many accounts at once could actually hurt your credit score because the closure may increase the percentage of your available credit limit you've used — and make you appear to be charged to the max.

Limit Your Cards and BalancesInstead, the best strategy is to limit the number of cards you use and keep your outstanding balances to about 30 to 50% of your total available credit. For example, if your credit limit is $3,000 do not maintain a balance of more than $1,000-$1,500.
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