Credit Education is very important so we are taking the opportunity to talk a little about credit management. Specifically, how you can improve your credit score over time no matter how bad things get.

Step One: Track Your Credit Score – In his blockbuster bestseller ‘The 4-Hour Body’, famed iconoclast Tim Ferris points out that you cannot lose weight without getting on a scale and you cannot build muscle without testing how many pounds you can move. Therefore, it should be obvious that you cannot improve your credit score if you do not know what your credit score is. So, start by signing up with one of those agencies that lets you view your credit score whenever you please, and make yourself a chart on your wall. The more obvious it is that your credit-improvement tactics are working, then the more you will be willing to engage in them.

Step Two: Pay Everything Off On Time – This is a big one. The most damaging thing to your credit score is an overdue bill and the more important the bill, the more damage it deals. If you simply do not have the money to pay a particular bill on time, pay off the biggest bills first. Missing one payment on your mortgage will hurt your credit much more than being three months late on your phone.

Step Three: Get Credit Cards – This is the deep dark secret of the industry; the more bills you have to pay (and do pay), the better your credit gets. The trick is to arrange yourself so that you have many small bills to pay off, and then pay them off.  If you have a few different one-off credit cards like a Sears card, a Target card, etc., and you use each one to make a $10-$20 purchase each month, then pay it off as soon as you get home, which will help your credit score skyrocket. Just be sure to avoid annoying things like monthly or annual fees, and it will be well worth the paperwork in the end.