Steps to improve credit

Now that you are familiar with your credit report, you can start working to improve it. Once a creditor reports negative information to a credit bureau, it remains in your file for seven years. However, negative information becomes less damaging over time.

To improve your credit, take the following steps:

• Pay your bills on time. Remember, if you let a payment slide, you will incur a late fee and a penalty charge.
• Pay off high-interest loans first. By paying down these obligations, you free up interest money that can go to other bills.
• Pay off credit cards monthly.
• Apply only for the credit cards you need. It's easy to run up debt when you have a lot of credit available.
• Use your credit card to establish good credit. By paying on time and by paying down the debt, you will show creditors that you are creditworthy.

When using credit, most charges should be repaid within three months of the purchase. Be sure you know the costs of credit including the credit card's annual fee, the interest rate you will pay, and any charges for overdue payments or going over your credit limit.