5 Rules That Credit Experts Live By

We’ve been over this before: Minimize your debt, pay your bills on time and only borrow what you can afford to repay. Those are some of the basics of good credit management, but there’s more to it than that.

There’s a lot of personality in your credit history. You have different circumstances, priorities and strengths than your neighbor, and that’s not a bad thing. Even among experts who preach the credit fundamentals, everyone has his or her own strategies. It’s called personal finance for a reason.

So how do the credit experts manage their credit? We asked, and they provided the go-to tips they’ve used successfully for their own finances.

1. Beware the Medical Bill

Gerri Detweiler, Credit.com’s director of consumer education, says one of her top priorities is to avoid medical debt. Health care bills commonly wind up in collections, sometimes before the patient has even had a chance to pay it.

“I’ve seen too many horror stories of people getting collection accounts over a medical bill,” Detweiler says. She said she’s had her own close calls with medical debt, and knowing how damaging a collections account can be to your credit has made her extremely cautious. She advises you read your explanation of benefits closely and get in touch with your health care provider and insurance when you have questions.

“I dislike dealing with paperwork as much as the next person,” she says, noting she keeps a file of all her medical bills and receipts. “I’m super, super careful about it because I know easily it can affect my credit for the next seven years.”

2. Make the System Work for You

Jason Steele, a Credit.com contributor and credit card expert, says you can use the credit card industry to your advantage beyond the simple credit-building behavior of using your cards and paying the bills on time.

“We all know when our payment due date is, but few remember when their statement closing date is,” he says. “Those who avoid interest by paying charges in full every month can have an extra month to pay a charge made just before this date. Also, knowing the date will help you to figure out when you are going to receive your rewards.”

Steele says to remember that credit card issuers are business people who want to keep customers happy. Otherwise, you may take your spending elsewhere.

“Always ask for something,” Steele says. “You can ask to have annual fees, late fees, or even an occasional interest charge waived. You can even ask for a higher credit limit, a lower interest rate, or more rewards. Banks will often say yes to customers in good standing.”

3. Don’t Obsess Over Numbers

Credit scores are incredibly helpful for measuring your progress toward financial goals, monitoring for identity theft and making smart credit decisions. But some people get too caught up in striving for credit perfection. Ups and downs are normal.

Rod Griffin, Experian’s director of public education, says he checks his credit scores to make sure everything is OK a few months before filling out a big credit application, but otherwise, he focuses on his credit reports.

“I make sure that I do common sense kind of things to manage my credit,” Griffin says. “If I take care of my report, my score will be fine.”

He gets his free credit reports every year, which everyone is entitled to do, and if he has any specific concerns (like in the wake of the massive Target data breach), he’ll be sure to request a credit report.

“Worry about managing the debts you have,” he says. “It’s not helpful to worry about a number unless you know the number they’re using.” He’s referencing the dozens of credit scoring models used by lenders, which is why you have so many different scores. If you’re looking to raise your scores, you need to make sure you’re comparing the same score month to month, using something like Credit.com’s Credit Report Card, which shows you two of your scores used by lenders for free. Otherwise, if you’re looking at different scores, you’re comparing apples and oranges.

4. Make It Simple

Sarah Davies, senior vice president of product management and research at credit scoring company VantageScore Solutions, knows her priorities are to live within her means and plan ahead so she’s not in financial trouble, in case of emergencies.

For her, the best way to make sure she meets those goals is to streamline her financial information. She mainly uses one credit card for most transactions, and her bank’s online tools allow her to easily keep track of where her money goes.

“I think the short term trick for me is awareness,” Davies says. “You kind of always need to be aware of how the numbers are adding up, so to speak. I pretty quickly can understand what my financial picture is at any moment.”

5. Be Flexible

Personal finance is forever — FOR-EV-ER — so you’re not going to plan it all out in your 20s and be done with it. Michael Bovee, creator of the Consumer Recovery Network, says it’s important to modify your financial plans and actions as your priorities change. About a decade ago, he used to chase credit card rewards, but even though he earned a lot of them, it’s not as important to him anymore. Planning for retirement is his focus now, even though that’s several years down the road.

And no matter what the focus is at any time, he says it boils down to keeping his debt-to-income ratio low, and he adjusts his finances as the economy fluctuates. Despite the fact that he does credit counseling for a living, he doesn’t obsess over credit. Awareness and flexibility goes a long way in personal finance.

“It just became maintenance,” he says. “I actually think very little of credit in my spare time.”