common rookie mistake.
DO NOT refute any old account that is not in bad standing just because it looks "Bad" to YOU.
Check with the board first.
It will kill youir AAOA and they wont re-report it usually if its THAT old.
Through experience I have learned the following:
1. First, sit down with your spouse and look into each other's eyes and ask yourselves, do we really need a credit card(s)?
2. Learn to distinguish between a "NEED" and a "LUXURY"
3. Learn to use "CASH" first and as a last resort (i.e, emergencies) "CREDIT"
4. Set goals for your credit history. My father told me once, "Son, I have been able to say (3) times in my life, I owe nothing to no one". Aim for that type of goal.
5. Spend less than you make
6. Be honest; don't fudge numbers (it will come back to haunt you and your family)
7. Use silver to pay for Christmas, birthday's, anniversaries. I buy silver rounds, bars, etc. all year to sell them via E-bay and use that money for Christmas gifts, etc.
8. Any probably MOST imporant have at least $5,000 savings or more in the bank at all times. You have no idea who much that has saved me from getting further into debt.
9. My father taught me a great lesson when I was young. He said, "always pay 2 weeks before your due date and 10x to 15x the minimum payment". My dad had AAA credit almost his entire adult life.
10. Enjoy life; don't be obssessed with your Fico score 24-hrs a day. I know people who are like that. It defeats the purpose of having good credit
Hope this advice helps. Thanks for allowing me share and as always enjoy what remains of your day.
Things I wish I would have done at a young age:
1. Lived on HALF of my income or less and invested/saved the rest. This is actually easy to do when you enter you first enter the workforce (and are going from earning $0 income.)
2. Stayed away from car payments. I had nice, dependable cars that turned heads before I started financing. They were just older and well taken care of.
3. Pass on financing and pay cash for any furniture, electronics, jewlery, etc.
4. Started a 401k and contributed enough to receive full employer match as soon as one was offerred to me. DO NOT touch it for any reason.
5. Budget and track ALL expenses. In particular, I would have benefitted the most from adhering to a set spend on restaurants/bars/travel/entertainment.
6. Never pay interest. (initially when you're young . . yes, there are instances later where an investment can earn more than the % interest you pay and borrowing sometimes makes sense.)
7. Keep your eye on the big picture. Do you want to spend a bunch of money on cars and consumer goods in your early twenties or live in a home you own with no mortgage by 30?
8. Start generating passive income.
9. Pay attention to all of your medical expenses and insurance explanation of benefits and patient portions. DO NOT let dumb $75 or whatever bills go to collections and drag down your credit.
One thing I at least did right was paying for nearly all of college in full each semester. If you do need to borrow, DO NOT DEFER PAYMENTS. Get started on it right away and make it your goal post graduation to knock out your loans in a few years tops.
I also recommend living at home as long as possible. I did this, but was too busy having a good time with the $$ and not saving. Had I put away $1000/month for the 7 years I was earning good money working full time and living at home, that would have amounted to $84,000. Investing would only make the # higher.
One thing I do now is I try to annualize every purchase I make. $3/day seems like nothing, but is over $1000/year. In 10 years, $10k is the price of a great used car. Do the math on everything and see how much you can save in a quarter, season or annually by skipping the expense or choosing an alternative. I spend summer weekends at a friend's beachhouse. I prefer to drive, but with the cost of gas/tolls/parking, taking the train saves me $40 per weekend. Not earth shattering on it's own, but $40 per weekend over the 20 weekends I was there is a savings of $800. Not to mention, saving wear and tear on my 11 year old car that I own outright is only going to preserve it.
Other posts mentioned autopay which is great, but I still recommend having a list of ALL bills and simply checking EVERY account each payday and making sure that everything due before the next payday is paid. (If you're going the autopay route, this just double checks that your payments are going through.)
I know this post started out with tips/tricks to improve credit, but IMO if you establish good financial habits good credit will follow almost on it's own. Basically you get an installment loan and three credit cards (and keep the usage low) and don't apply for too much and your credit will be dandy.