If you're really knee-deep in debt, pick up the phone and call AAA Fair Credit Foundation at 1-800-351-4195 to help you sort things out.
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Step 1
Check your current credit score and report to gauge where you stand now. It will become apparent how much work there is to be done.
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Step 2
Pay all your bills on time. Each late payment is reported to your credit history. It will damage your score and show up on your credit report.
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Step 3
Keep things like credit cards or loan options away from the limit. Maxing out a credit card is considered a negative for credit. It will show up as a demerit on your credit history.
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Step 4
Apply for a credit card and use it. Use it with discretion. If you have never had a credit card before, we recommended you start by making small purchases. Pay them off at the end of the month.
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Step 5
Maintain a low amount of revolving credit debt. It helps your credit history if you can keep a low running balance on your credit card. Make payments on it every month.
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Step 6
Try to keep a ratio of 1/3 on your credit resources. For example, if you have a credit card with a limit of $10,000, try to keep your revolving balance no higher than $3,500. High revolving balance on credit resources works against your credit history.
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Step 7
Apply for a loan, like a car loan or student loan. Make payments on time and in full. This will add another example of good credit use on your history, and this will help develop your history.
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Step 8
Continue to check your credit on a regular basis to insure your history is accurate and positive. Many websites offer credit monitoring and reporting, and this can help you identify any problems you might have with identity theft. Unfortunately, that's one of the most common causes of spoiled credit history.
