Credit control: Proper payment, vigilance help maintain good credit

  • Published
  • By Senior Airman Andria J. Allmond
  • 512th Airlift Wing Public Affairs
( Editor's note: this is the second in a three part series covering good credit) 

'Pay your bills and don't buy things you can't afford'
may sound like easy enough instruction in maintaining good credit, but continuing a favorable credit report may require more specific measures. 

"Maintaining good credit essentially means always paying your debt obligations on time and for the required amount," said Shannon Bertram, Fort Sill National Bank proof operator. "But, there are other things you can do to ensure the good credit you've built stays that way." 

One: Make payments within 30 days of due date
The most basic action a person can take is to make payments on credit cards or loans within 30 days of the due date. If payments are made after the 30-day mark, the lender may report this to credit agencies as a 30-day late payment. A credit report can show "1x30," which means that the borrower has failed to make the payments one time in the 30-day period. 

If payments are delayed past 60 or 90 days from the due date, the credit report may show "1x60" or "1x90," meaning the borrower has not made payments one time in 60 or 90 days. 

If payments are delayed past 90 days, a credit report may show the account has been sent to a collections agency. This can remain on a credit report for up to seven years. 

"Paying your bills on time can be made easier by taking advantage of automatic payments and other online bill payment strategies offered by lenders and credit card issuers," said Anita Taylor, FSNB branch manager. 

Two: Pay off credit card balances in full
Besides making payments within 30 days of the due date, another suggestion is to pay off the full balance of credit cards each month. This builds a strong payment pattern, which suggests a sense of accountability for debt responsibilities. Paying off debts in full help to decrease the amount of money spent in the long run. 

"Once you start paying more than the minimum, the debts start to disappear," according to, an online free financial service. "Paying just the $60 minimum payment on a $3,000 credit card balance would take eight years to pay off and cost a person a whopping $2,780 in interest. By paying an additional $50 a month, the debt would be paid off in three years, and they would be spared $1,800 in interest charges." 

Three: Review credit reports for errors
"About one in four credit reports have errors," said Ms. Taylor. "This is why it's important to review your credit annually." 

Inaccuracies depicted in credit reports can be caused by two reasons: either a payment on a loan has not been documented correctly or a billing company has posted incorrect nonpayment information. 

"It's very important to know what information is contained on your credit report. It's possible that misinformation or errors on your report could cause a loan to be denied," said Retired Col. John J. Kotzun, who spent 27 years as an officer in the U. S. Air Force before becoming a Dover Federal Credit Union Investment and Retirement Center representative.

"Reports can contain errors," he said. "This is one reason why you need to review your credit report annually as allowed by Federal Law. Another reason is to ensure that you have not become a victim of identity theft. You can obtain your free credit report by accessing" 

While keeping up with the health of your credit report may prove helpful in maintaining your good credit score, too many inquiries may have the opposite effect. 

Four: If possible, limit the amount of credit inquiries
Every time an application for credit, or in some cases employment, is made, a credit inquiry may be made on an individual's credit report. 

Multiple inquiries over a period of time may have a negative effect as it may be seen by lenders as an act by an applicant who is anticipating financial problems, said Ms. Bertram. Credit agencies may be somewhat forgiving if there are multiple inquiries within 20-30 days. This may be seen by the agencies as a sign the individual is looking for the best deal and may count it as only one inquiry, she said. 

"Lenders, employers and insurers use credit reports to help assess an individual's character, credit worthiness and capacity to pay additional debt," said Mr. Kotzun. "Numerous and recent credit checks will be viewed negatively by lenders as it may be an indication of someone loading up on debt." 

Five: Avoid bankruptcy
"Not being able to make good on debt says, 'I do not have the money to pay my bills. I am a risk,'" said Mr. Kotzun. 

A bankruptcy stays on an individual's credit report for approximately seven years, said Mr. Kotzun. 

"If a person declares that they have reached a point where they are unable to pay their bills, it's on the record that the person has bad credit," said Mr. Kotzun. "But, the person can pay off that debt over time, leading to a credit record indicating they paid off the balance. In the eyes of the lender, the paid balance reflects a bit more positively on the borrower's responsibility." 

It is imperative to have an excellent credit history so lenders will be willing to grant credit at the lowest rates, reducing the amount of interest charged, he said. 

The goal is to follow the steps necessary to maintain the credit you've built up in the first place and not get to the point of bankruptcy, said Miss Bertram. 

"Once good credit is created, it's essential to maintain," she said. "It's very easy to fall into having bad credit or debt. A pair of shoes here or an extra splurge there, may be what puts a person over the top. Retaining a good credit rating is an active process." 

Airmen and their families interested in obtaining general finance information can contact the Airman and Family Readiness Center at (302) 677-6930. Financial and investment advisement is also available to all Dover FCU members as a no-cost service and may be accessed by contacting Mr. Kotzun at (302) 678-8356.