The world of credit reports, credit scores, and credit repair can be daunting. But there are a few key concepts that will put you quickly on the road to achieving your credit goals, without spending a lot of time and energy. If you learn nothing else about credit, learn these concepts. And if you need more help, get in touch with us.

1. Talk to your debtors. Avoiding your credit situation just makes things worse.

Having less-than-great credit feels bad, and sometimes hopeless. We know – we help people improve their credit because we were once there too. But tough love: don’t avoid your credit situation. Face the facts. And remember that a low credit score is not an indication of what sort of person you are. It’s just a number, and it is fixable. So dig in and start now.

The first thing to do is communicate with whoever has (or might) put negative items on your credit report – your credit card company, collection agencies, the car loan folks, etc. Communicating with whoever you owe money to or have a bad history with paves the way to better credit.

2. Missed payments hurt. Do everything you can to make payments on time, but get smart about exactly when and how.

Missed payments hurt your credit worse than pretty much anything. But if you’ve  missed some payments, don’t worry about it. The past is the past, and we’re moving forward. So if you do only one thing to fix your credit, do not miss payments.

You may be thinking “There’s no way I can cover my payments right now. I don’t have the cash.” Don’t worry – there are a number of ways to get your payments made, even if you don’t have the full amount you owe. This includes everything from payment plans to grace periods to negotiating collections way down. Learn more here. 

3. Credit cards are actually good for credit.

Many people have this backwards, but you heard that right. Closing out a credit card does not help your credit – it often hurts it. On the other hand, using a credit card and maintaining a small balance actually helps your credit. In fact, credit cards are the fastest way to show that you can manage debt responsibly, which improves your credit. But there’s a catch – you have to manage your credit responsibly! Learn more about how to use credit cards successfully, and which cards are right for you.

4. Credit age is very important.

In short, credit age is the amount of time you’ve had any sort of debt or bill that reports to credit bureaus – a credit card, car loan, utilities account, etc. If you have zero credit history, the credit bureaus have no way of knowing if you can manage your debts and bills responsibly. On the other hand, the longer you have had credit, the more data the bureaus have to evaluate your creditworthiness. Learn more about building and maintaining credit history here.

5. Collections are one of the easier, faster ways to improve your credit.

A collection agency is a company that has been hired by a debtor to collect a debt, because it’s too much of a hassle for, say, the city where you have delinquent parking tickets to chase down folks that owe them. The important thing to know is collections agencies will often accept a lot less than you originally owed. They’ll consider the debt paid in full and completely remove it from your credit report, which can improve your credit very quickly. Learn the right way to deal with collections here.

6. Disputing negative items with the credit bureaus is a small part of the equation.

If you can dispute a negative item and get it removed from your credit report, that’s great, and it will help your credit score. But the truth is, many negative items are not wrong, and the credit bureaus won’t remove them. We encourage you to dispute anything that might actually be wrong (or have someone like us do it to save the hassle) but don’t rely on this to repair your credit. It’s not a quick fix. Learn more about when and how to dispute negative items here.

Last thing: it’s possible you don’t need to worry about all of these topics.

One of our expert credit coaches can help you understand which of these topics you should focus on for your specific credit goals, and work with you to create a plan to get there.