Seven Steps for you in 2007

Get a jumpstart on 2007 with these seven tips. Following these guidelines will help you better your credit in the new year.

1. Create a cash flow budget - it is possible to attain good credit with minimal cash flow. By creating a budget of the cash you have available and changing your billing cycles so that they are spread out over the month, chances are better that you will be able to pay your bills on time.

2. Pay your bills on time and consistently - late and missed payments, especially accounts that have been sent to collections, have major impacts on your score. Since not all companies report to the credit reporting agencies, find out who reports and who doesn't, this will help you prioritize your bills. Also, find out when your credit card companies report to the credit bureau and change your billing cycle to ensure you pay your bill before they report.

3. Get a free copy of your credit report from all three credit bureaus – by law, everyone is entitled to a free copy of their credit report each year. Also, take the time to learn what your credit score is comprised of and what will impact it most.

4. Do not use a credit repair agency – there is nothing a credit repair agency can do for you that you cannot do for yourself. Education is key. Fix any errors you find on your credit report - 1 in every 4 credit reports have serious enough errors to cause a negative impact on the credit you are applying for.

5. Dispute negative debt with credit bureaus (only on closed accounts) - the collection agency has to respond within 30 days or else it will have to be removed from your credit report. Don't pay old bad debt accounts - it is best to pay off very recent collection accounts, however in most cases it is better not to pay off an old collection. Instead, let it drop off your credit report which takes seven years. If you pay off an old collection account it will show up as new activity on your report (for another seven years), thus lowering your score.

6. Look for times during the year where you may have extra money available and pay down your credit card debt (holiday bonus time or when receive your tax refund, etc) - it is important to keep the amount of revolving debt on any card at less than 25 percent of the available credit line, the closer you come to being "maxed-out" the worse your credit score will be.

7. If you are going to be opening up several lines of credit in 2007, space them out – taking out too many new lines of credit in a short period of time (90 days) raises red flags and makes you look like a greater risk factor. Close store cards that you have open. Store cards traditionally have low limits, making them easier to max out. Plus, since you can only use them in one place, they tend to effect your credit negatively.