Ah, your creditors are not your friends. They give you money but charge you to use it. the interest rate and fees are based primarily on your credit scores and credit history. How does a potential creditor know your credit scores and history? They get these things from a credit reporting agency. Makes sense doesn’t it? But is this all there is to know when it comes to your credit and improving your scores? What I will cover in this article could impact your pocketbook forever.

First, here is a bit of history to read.

They are not your friends. As reported in the documentary “Maxed Out,” creditors pay credit reporting agencies to report your credit history. Also, reporting agencies don’t have much of an incentive to make sure your credit report is accurate since your creditors pay them to report your information. They have an obligation to fix something that’s wrong on your credit report, but you need to challenge it first.

They make it easy to get credit and then “make” you keep it. If you look at what happened in the US over the last 15 years, more and more people got credit cards. At the same time, personal bankruptcies skyrocketed. Credit card companies were making money hand over fist, but as personal bankruptcies began to rise, things began to change. Credit card companies began to come under pressure and they didn’t like it. They didn’t like it so much that, according to the documentary “Maxed Out,” it was MBNA, a credit card company, that pushed the new bankruptcy law through Congress in 2005. This law made it harder than ever to file for personal bankruptcy. . .

Second, with this history in mind, let’s look at some things you can do to impact your credit scores and credit history that credit card companies and reporting agencies won’t tell you.

There are consequences for having certain types of credit cards. You need to consider what type of credit card to get. Although the instant 10% discount is tempting, don’t buy department store credit cards. In general, lenders look unfavorably on your credit report because these cards are issued to almost anyone with a social security number. You don’t need to have good or no credit to get them. Get a couple of Visas or Mastercards from Bank of America, Citibank, Wells Fargo and/or Discover. These cards will go a long way in helping you establish credit, improve your credit scores and qualifications. Be sure to use these cards carefully and pay them off each month. Do not have more than 3 or 4 of these cards.

Opt out of credit card offers. Not only will you be saving a tree, but your credit score could go up just by opting out of credit offers. Go to OptOutPreScreen.com and fill in the information. You should be removed from most mailing lists within 2-3 months.

Get a prepaid debit card. The good thing about this credit solution is that you have to have the money in the bank to use with your card, so you can only buy what you can afford. Plus, most prepaid debit cards report to credit reporting agencies, so your credit score will be much happier if you make your payments on time. You can also use this account to set up payments for your utilities, cable, phone, and Internet access, etc.

Don’t cancel your old credit cards. A part of your credit score is based on your credit history. When you cancel a card, your credit history goes with it. It shouldn’t cost you anything to maintain it anyway. If you don’t like the idea of ​​having it, just tear up the old card. If the credit card company tries to charge you an annual fee, simply tell them you want to cancel it. Most likely, they will just give it up.

Keep your credit card balances low. Just because you have a credit card doesn’t mean you have to use it or have it to the max. As a general rule of thumb, you don’t want to exceed 30% of your available credit limit, and no more than 50%. So if you have a card that has a limit of $10,000, at most you don’t want to have more than $5000 loaded on the card. Once you exceed this limit, your score will begin to be negatively affected.

Limit your credit inquiries. Don’t run around town and let every department store or car dealer check your credit. There is nothing wrong with throwing it here and there. If you have thrown it many times in a short period of time, your score will drop like a rock. I have seen as much as 80 points in a 30 day period.

I have given you many things to think about. Some of these suggestions will work better for one person’s credit report than another. It all depends on your unique situation. What I have laid out are some general tips for improving your credit scores and reports that will lead to better interest rates and loan programs. My best advice, if it doesn’t feel right, don’t buy it.