Whether you are shopping for a new home or auto, or searching for the best deals on insurance, your credit worthiness is judged by your credit rating or credit score. A bad credit history will increase the number of “black marks” on your credit profile.

These include items or transactions such as late payments, having an account assigned to a collection agency, and of course bankruptcy.

Establishing good credit rating can and will improve your credit worthiness which will in turn be reflected in potential lenders offering you substantially lower interest rates and better deals on credit offers.

Below are 4 tips to help you create a perfect credit profile:

#1. Obtain the right number of credit cards
Many financial advisors and credit experts suggest two to four credit cards is just about right. Having too many suggest uncontrollable spending and too few or none at all can suggest bad credit rating.

#2. Keep your bill payment dates
In other words, pay your bills on time. Lenders only have your past payment history on which to decide the type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.

#3. Pay At Least The Minimum Due Or More
Always pay at least the minimum due payment for all loans or debts, but never less. Even though just paying the minimum payment means it will take you longer to settle your debt it is fare better than not paying at all.

#4. Request and Your Credit Report at least once a year
By law, each consumer is entitled to at least one free credit report per year. It is always important to obtain and review what information all three major credit bureaus – Experian, TransUnion, and Equifax – hold on you. Review it carefully ensure that any inaccuracies, past mistakes or disputes have been corrected.

Also, if you notice an account listed that you know that you have not personally opened, contact that creditor and the credit bureaus immediately. This could be a sign that you’ve had your identity stolen. Request to have a fraud alert placed on your profile and account to protect yourself and your credit. Identity theft is the fastest growing consumer crime in America, with an estimated 1 million people victimized each year.

If you establish good credit habits early in life, you will reap the benefits that your good credit rating will provide you in the future.

See also:

Credit Card Debt Consolidation

Credit Card Debt – Four Ways to Avoid Credit Card Debt

Prevent Credit Card Fraud By Using These TEN Tips