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Credit Commandments

Updated on March 2, 2015

Although I 110% believe you should avoid debt I cannot deny that good credit is very important to have as credit affects many different aspects of your life. From mortgages to business loans, good credit will open up many different doors that bad credit can close. If you start good money management habits early then your credit will help you in many ways throughout your life. Likewise, if you have bad money management habits you credit can become a roadblock in your future.

Before I go into my credit commandments I would like to explain how the credit scoring system works. There are three credit reporting agencies: TransUnion, Equifax, and Experian. They all have their own credit report and score. Your credit score ranges from 300-850. Scores about 760 are considered the cream of the crop. Scores below 620 are considered poor. Below is a chart of all the factors that are calculated into your credit scores and the weight each one holds.

Now that you understand how you credit works here are credit commandments to help you establish, rebuild and/or keep good credit.

Commandment #1-Thou shalt pay credit card balances in full every month.

Do not carry balances from month to month. This is a sign that you do not have control of your spending. Credit cards are simply a matter of convenience-not an excuse to buy things that you can not afford. Most people believe that their credit will not be affected if they pay the balance by the credit card due date; however, this is simply not true. Credit card companies have a specific date that they report to the credit reporting agency. Whatever your account looks like on this particular date is what will reflect on your credit report; thus, affecting your score. You should contact your credit card companies to make sure you know this date so that you can have your credit card balance(s) taken care of a few days before this date every month.

Commandment #2-Thou shalt not close down old credit card accounts.

If you close down old accounts you will not only shorten you credit history, but also decrease the amount of credit available to you. Both of these actions will have a negative effect on your FICO score. If you have an old credit card you should just use it every once in a while to keep it active; however, make sure it is paid in full after every purchase.

Commandment #3-Thou shalt pay off any outstanding debts on time.

As you can see from the chart above payment history makes up for 35% of your FICO score which is the single largest factor. When you are in the process of paying off debts make sure you are paying all your minimum payments on time. Autopay is a great way to make sure you are never late. Making on time payment is crucial to your credit health.

Commandment #4-Thou shalt not charge more than 30% of my credit limit.

This one is for people who are already in debt-not those who will pay their balance every month in full. If you are in debt up to your eyeballs one of the quickest way to improve your credit score is by making sure you get and keep all your balance below 30% of the total credit limit. You should build this into your debt payoff method. See my A Free Man’s Slavery blog for more information on the debt payoff methods.

Commandment #5-Thou shalt check their credit frequently for accuracy.

According to the Bureau of Justice Statistics the majority of identity theft incidents (85%) involved the fraudulent use of existing account information, such as credit card or bank account information. This statistic is why you should always credit report to make sure all information is correct. You are entitled to one free credit report from all three agencies every year at In addition, to this you should sign up for to periodically check throughout the year. Credit Karma only provides Transunion and Equifax reports and scores so you will need to find another source to get your Experian report and scores.

Commandment #6-Thou shalt not apply for more than one credit card in a short period of time.

Credit scoring systems gives a two week grace periods to people applying for mortgages and auto loans because it understands that consumers are looking for the best rate and terms. Unlike these loans credit cards do not have the same grace period. Each credit card application is counted as a hard inquire which will affect your credit score. Do not try to improve your score by taking out several credit cards at once. This will actually have the opposite effect on your credit in the short term.

Commandment #7-Thou shalt not cosign

Cosigning is one of the most financially stupid decisions you can make. Most people do not really look at the reason why the creditor is requiring a cosigner for your friend or family member. It is because the creditor does not believe that they will pay the loan so why would you put your credit on the line for them. Instead you should share my website with them so that they can get their finances in order and be able to stand on their own to financial feet.

Commandment #8-Thou shalt file bankruptcy if you can not afford to pay your debts.

The perception of bankruptcy is worst than it really is. Yes, your credit will be destroyed, but based on the fact that you can not afford to pay your debts already is a sign that your credit is not in the best shape. If you made a good faith effort to pay your debts then you should not let the bad connotation of bankruptcy stop you from financially starting over on solid ground. Once you have the debt burden lifted off of you, you can begin to rebuild a more solid financial future.The only warning I give about bankruptcy is that you examine what mistakes you made to get you to that point and make sure you are doing what it takes to correct these mistakes so that you are not repeating the bankruptcy process in few years.


1) Pull your credit report and review for any errors. If you do find errors contact the agency to fix the inaccuracies.

2) If you have credit problems put these commandments into action to improve your score.

3) If you like this blog leave a comment below and follow me.


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