Home > Credit 101 > The 10 Credit Commandments

Comments 0 Comments
Advertiser Disclosure


Whether you are thinking of buying a home or getting a new car in the future, you need to pay attention to your credit. You can take certain actions now to be prepared when it’s time to make those big life decisions.

Here are 10 credit commandments that will help you on your road to better credit.

1. Thou Shalt Pay Bills On Time

It is no coincidence that this is the first commandment. One of the biggest factors of your credit score is your payment history. A late payment can result in a big ding. To ensure your credit score is where you want it, pay your bills on time. Make it easy by setting up automatic bill pay.

2. Thou Shalt Guard Personal Data

Take precautions to protect your identity. Be very stingy with your personal information so you don’t become the victim of fraud. You can’t completely prevent identity theft, but you can take steps to reduce the likelihood that you’ll be a victim. This means monitoring your credit card and bank accounts carefully.

3. Thou Shalt Be Informed

Know where you stand. Make sure you know your credit scores so you aren’t surprised when you go to buy a home, apply to rent an apartment or purchase a car. Check your scores regularly. You can get two of our credit scores for free every month with the Credit Report Card, a free tool that shows you the biggest factors impacting your scores. You should also pull copies of your credit reports — you can get them for free! — from each of the major credit reporting agencies. If you find errors, dispute them.

4. Thou Shalt Be Proactive

Don’t wait for collectors to come calling. If you can’t make your minimum payments, call your creditors or reach out for help from a credit counseling agency. Let them know you are having trouble but that you are serious about paying back your mortgage, student loans, etc. Often you can figure out a repayment plan that will work for your current situation and avoid having an account charged off and sent to collections.

5. Thou Shalt Not Cancel Old Credit Cards

Your credit score is partly based on the length of your credit history. So before you cancel your old credit cards, think about what it will do to your credit score. This doesn’t mean you should never cancel a card, but you should be aware of the impact.  If your card issuer charges an annual fee and won’t waive it, if you have a co-signer on the account who may run up charges you will get stuck with, or if you are tempted to overspend because you have the card, you still may choose to cancel it.

6. Thou Shalt Shop for Credit Carefully

You may not want to make too many big changes at once. While you will want to shop around for the best price and rates when you borrow, you want to be aware that too many inquiries into your credit can damage your credit score. Make sure you understand how inquiries work before you embark on a credit binge.

7. Thou Shalt Use Credit Cards Responsibly

Plastic can make it tempting to buy more than you can afford. But try to think of your credit card purchases in the same way you think of cash purchases – you shouldn’t spend more than you have. Make it a goal to pay off your credit balances in full every month.

8. Thou Shalt Pay More Than the Minimum

Your credit card statements will tell you how much you owe on the card in total and how much you owe for that month. But don’t be fooled into paying just the minimum. This will leave you paying much more in interest. Avoid making the minimum payment unless you are really strapped for cash or you are using the avalanche or snowball method to pay off your debt, which requires you to make minimum payments on all cards except the one you are trying to pay off at that moment.

9. Thou Shalt Stay on Top of Finances

Take steps to track your spending, create a budget and live within your means. Have financial goals – both long and short term – that you can work toward.

10. Thou Shalt Keep Ratios in Check

You want to make sure you are not maxing out your lines of credit (it’s best to use no more than 30% of available credit). If you are constantly at the top of your credit limit on your credit cards, your credit score will suffer and you will be considered high risk. Also, keep your debt-to-income ratio in mind. You don’t want to be overextended. In addition to the money stress this can cause, it can also prevent you from getting new loans or the lowest interest rates.

More on Managing Debt:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team