Linda Carleton, Client Services Support

Many things can impact your credit rating, including the amount of debt you carry, the age of your credit history (the older the history and the longer in good standing, the better), reports to collection agencies, late payments, the number of hard inquiries for credit, and the number of accounts you hold.

National Credit Education Month provides opportunities to brush up on your finance skills, check your credit score and find out why it’s important to keep a clear credit report, and – even more important – find out how to improve it.

Here are some tips to manage and improve your credit:

  • Check your credit report. This should be done at least 60 days or 90 days before applying for a loan in order to make sure that the report is correct. If it's incorrect, make sure to notify a credit agency before you apply for a loan.
  • Pay your bills on time. When a bill is paid late, or is even 30 days past due, it can show up on your credit report for up to seven years.
  • Manage credit responsibly.  Less is more. By cancelling credit accounts and getting new ones, you cause a negative impact on your credit score. It can take months or even years to repair.
  • Avoid going over the credit limit. Some credit card companies allow you to do this as a courtesy, but it can negatively reflect on your ability to handle your account.
  • Use credit when needed. If you never use credit of any kind, it doesn't mean that you'll have a great credit history.  Most lenders prefer to see at least three to four accounts reflecting a satisfactory 24-month payment history. 
  • Avoid "shopping for credit." Each time you apply for a loan or credit card, an inquiry from that lender will be reflected on your credit report. Inquiries can affect your credit score. 
  • Add an installment loan to the mix. You'll get the fastest improvement in your scores if you show you're responsible with both major kinds of credit: revolving (credit cards) and installment (personal loans, auto, mortgages and student loans).
  • Use your cards lightly. Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your score by limiting your charges to 30 percent or less of a card's limit; 10 percent is even better.
  • Consider limiting your credit.  Applying for a new account, transferring balances, or concentrating all of your credit-card balances onto a single card can result in a lower credit score.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. Under federal law, you’re also entitled to a free report if a company takes adverse action against you, such as denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action (the notice will give you the name, address, and phone number of the credit reporting company). If you’re unemployed and plan to look for a job within 60 days, if you’re on welfare, or if your report is inaccurate because of fraud (including identity theft), you are also entitled to a free credit report.

You can request the free copy of your report at, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Do not contact the three nationwide credit reporting companies individually, as they will only provide free annual credit reports through the methods listed directly above.

Managing your credit score does not have to become a source of anxiety or stress. Take advantage of National Credit Education Month to learn more about your credit rating and ways to improve. A clean credit report and good score can help you with future loans and interest rates.

Sources: BMO Harris Bank, N.A.;;

Any opinions are those of Mainspring Wealth Advisors and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.