Do you want to improve your credit but don’t know where to start? Is it hard to see the light at the end of your credit tunnel?

You’ve come to the right place! Here are 17 tips to start improving your credit to achieve your financial goals. You’ll find that if you put these tips into practice, they will help improve your credit over time. It’s all about consistently exercising healthy financial habits.

After reading these tips, you’ll be on the path to financial success and freedom. Let the credit improvement begin!

Tip #1: Pay all your bills on time.

Budgeting to pay all your bills on time is the best way to achieve a good credit score. Even if you don’t have a credit history, you can establish one through timely payment of your bills. A 30-day late payment will result in a negative report on your credit report. If your accounts become 90 days past due, they will be eligible for charge-off.

Tip #2: Borrow no more than you can comfortably pay back.

Before you borrow money, review your monthly budget with someone who understands financial management. Discuss what you can afford monthly.

Tip #3: Avoid opening several new accounts in a short period of time.

Suppose you open several credit card accounts or take out multiple loans within a short period. In that case, this may indicate the possibility of overextending your money and negatively affecting your credit.

Tip #4: Do not bounce checks.

Do not write checks that exceed the funds available in your checking account. Don’t think you can bounce a check without consequences. Consumers with poor banking habits are flagged in the system, which could prevent you from opening a checking account in the future. For this reason, it’s important to keep your account current and avoid bounced checks and charges for insufficient funds.

Tip #5: Ensure you read and understand your loan terms and agreements before signing anything.

Understand your loan terms and agreements to avoid committing to payment amounts you cannot afford. If you cannot pay back your loan, it will negatively affect your credit report and score.

Tip #6: Be cautious about co-signing or guaranteeing loans for others.

When you co-sign or guarantee a loan for someone, you are agreeing to take responsibility for repaying that person’s debt if he or she is unable to do it.

Tip #7: Apply for a secured credit card.

You can apply for a secured credit card at a local financial institution. Ensure to ask the financial institution if the secured card will report to the credit bureaus because not all of them do. You will want to ensure it does or will not help you reestablish your credit.

A secured credit card requires you to deposit a specific amount of cash into a savings account. It is used to guarantee your credit card payments. Your credit limit is increased after you consistently repay your balance each month. This is a great way to build credit and a positive credit history.

Tip #8: Review your credit report and dispute any inaccurate information it may contain.

Sometimes there are errors on credit reports. Make sure that your credit report accurately reflects your credit history. If you know that you are going to apply for a loan, review your credit report at least 3 months ahead of time. Remember to check all 3 credit bureaus because each report may differ.

It doesn’t cost anything to dispute inaccurate information through the credit bureaus, and it is your right as a consumer to dispute information you feel is inaccurate. You will need supporting documentation when disputing any information.

Tip #9: Create a nontraditional credit history.

If you do not have an established credit history, you can create a nontraditional one for yourself. You will be able to apply for credit in the future. To build a nontraditional credit history, you can take the following actions:

  • Keep copies of your paid bills.
  • Keep copies of the canceled checks used to pay your bills or online confirmations.
  • Ask your payees (people/organizations to whom you pay bills) to write a letter stating how long you have been a customer and paid your bills on time.
  • Consider getting a secured credit card. When you use the card, make payments on time each month. For more details, see Tip #7 above.

Tip #10: Think long-term.

Establishing or reestablishing your credit takes time. If you are reestablishing your credit, it may take several years of consistent bill payments before a lender will give you another chance. Stick with it. A good credit history is worth the hard work and patience.

Tip #11: Call a credit counseling organization for assistance.

Many reputable credit counseling organizations are willing to spend time helping you work through your personal finance issues. Use accredited, nonprofit organizations and avoid programs that advertise a quick fix.

Tip #12: Do not max out your credit cards.

Keep your balances low! Using your full credit limits will not only overextend your budget but will also hurt your credit.

Tip #13: Protect yourself and your identity.

Be cautious when releasing your personal information. Identity theft is on the rise, and you should take every precaution when discussing and releasing your personal information, whether on the Internet or over the phone. Do not pay for identity theft protection. Monitoring accounts yourself is the safest and cheapest way to manage your finances.

Tip #14: Set a budget and stick to it.

A budget is one of the greatest tools to achieve financial success. Track your expenses, then create a budget that makes sense for you and your family. Monitoring and maintaining your budget should set you up for financial success in the future. Sticking to a reasonable budget can help you pay your bills on time to improve your credit report, which employers may check with the proper consent.

Tip #15: Avoid payday loans.

Payday loans are dangerous to your financial situation. Payday loan companies charge very high interest, and the collection fees and interest are unbearable if left unpaid. Even though it can be easy to fall prey to the payday trap, remember that a good budget, savings, and an emergency credit card are better options when you need funds for an emergency or unexpected bill than getting a payday or high-interest loan.

Tip #16: Build credit by using it responsibly.

The safest way to build credit is to set aside cash that you would use for everyday items (such as gas or groceries), use your credit to pay for them, and then use the money to pay off the credit amount each month. You can also build your credit by purchasing household goods with credit for ninety days or six months, the same as cash, and if you pay off your balance in full within that time, it will build your credit.

Tip #17: Beware of websites advertising “Free Credit Reports and Scores.”

Many websites advertise as “free” but charge consumers a monthly fee to monitor or pull their credit reports or scores. At AdelFi, we’ve partnered with SavvyMoney, our credit score and education partner, to provide access to your credit score, full credit report, and credit monitoring. Did we mention this service is no cost just for being an AdelFi member?

Hopefully, learning and practicing these tips will help you navigate the uncertainty and stress that debt and a negative credit situation can bring. Sometimes a financial situation can be so overwhelming or negative that it seems impossible to find a way to start unraveling and solving it. It can help to remember Matthew 19:26: “With man this is impossible, but with God all things are possible.”

As a financial institution composed of believers, AdelFi is here for our members today to advance what matters. Rely on our easy-to-use digital solutions for individuals, families, Christ-centered ministries, and businesses. We’re here to promote responsible stewardship and offer products aligning with your financial goals and Christian values.