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Good credit: How to make it happen

After clearing up his entire debt, Air National Guard Staff Sgt. Christopher Weiss’ credit score rose a mere 14 points — from 595 to 609 — between April and June.

The following is a financial counselor’s advice for raising that score over the next six months — and how you can raise yours:

Pay bills on time. Do this without fail. Look into your bank’s options for online bill-pay.

Use credit cards, but pay them off each month. “The more you do that, the better,” personal financial counselor Sean Hannon said. Keep credit charges below 20 percent to 25 percent of the available credit limit of each credit card.

Weiss has two credit cards now: a Military Exchange Star card with a credit limit of $3,150, which he got in June, and an American Express card with a credit limit of $2,000, which he got in April. Hannon advised charging no more than $700 in any month on the Star card and no more than $500 on the American Express card.

Don’t request more credit. In September, two of Weiss’ requests for credit will fall off his report because they will be 2 years old. Two will drop off by January. This will bring the number of requests on the report down to two. Weiss wondered whether he should ask for an increase in credit limit on the cards. “I’d say wait,” Hannon said. “They may raise it automatically.”

Don’t move. “The longer you’re at the same address, the better,” Hannon said. “Creditors are looking for stability.” Since Weiss is in the National Guard, his chances of staying put are good. As far as buying a house, Hannon advised Weiss to wait until after January, when four credit requests dropping off his report combined with several more months of timely payments and responsible credit management likely will raise his score. A credit score of 620 is the minimum to qualify for a mortgage, Hannon said, especially for Veterans Affairs Department loans.

Weiss also should give himself more time to save up a cushion to buy furniture and pay for other expenses associated with owning a home — about $5,000 is a good idea. Hannon said housing expenses — including the mortgage payment, taxes and insurance — should not be more than one-third of Weiss’ take-home pay.

Set aside funds for an emergency. Weiss has saved $5,000, with no debt, and he should keep piling up those savings to build an emergency fund equal to a few months of living expenses at a minimum.

Consider contributing to the Thrift Savings Plan. Contributions are made with pre-tax dollars, Hannon said, so if Weiss puts $100 into the TSP, his take-home pay would decrease by only about $90.

“It’s hard to give up today’s dollars for something 20 years down the road,” Hannon said, but the future arrives sooner than you think.