If your credit is in need of repair, the first step you should take is to find out how to remove all the negative information from your credit report, and then pay off all past due balances. It also helps to pay off all balances tying up your credit such as credit cards. This, however, still may not be enough to reinstate a good credit rating. If your recent history is poor, you will have to re-establish your reputation as a responsible borrower before you will be able to apply for any more loans.

Many people feel as though they simply aren’t cut out to use credit cards because they keep on racking up high balances without realizing it. The truth is anyone can learn to effectively use credit cards and the methods are quite simple. One of them is to only use your credit card to make large purchases. Everyday purchases like groceries and gas should be paid for in cash or with a debit card so you can keep track of what you’ve spent instead of waiting for a surprise in the mail.

One really bad credit habit is making only minimum payments on credit cards. By doing so, it may seem like you are lessening the burden, however in the long run it will take a very long time to pay off a balance this way. Even worse, the total interest accrued on that balance will be much higher than if you made larger payments over a shorter period of time.

Another terrible habit that leads to poor credit is purchasing items that you can’t afford. Credit is not disposable income so keep your credit card purchases within your monthly budget. There is no habit more counterproductive to your credit than having to sell off items at a much lower price than originally paid in order to pay off the credit card you used to purchase them.

A really great habit to have when shopping is having a preset list of needs and wants in your mind, and knowing how to differentiate between the two when looking at items to buy. Do not purchase items on your “want” list with your credit card as it leads to reckless spending. Instead, only purchase what you need with your credit card and aim to maintain balances between 0% - 30% as this does affect your overall credit rating.

Finally, in the event that you are not able to keep up your good habits for a month or so, don’t avoid being honest with your creditors. Explaining the situation in a timely manner helps to maintain trust between you and the institution, and can often result in waived late fees or an extended due date. The road to good credit is indeed one paved with good habits.