There is so much information available on credit, that we will only just be scratching the surface in this post. But we’ll give you some great links to take you to more sites, once we whet your appetite!

Myths abound when it comes to credit: “the more credit card accounts you have open, the better”…”the only way to get good credit is to pay off your cards in full each month”…or (my personal favorite) “once your credit is in the tank, it will take you years to re-build”.

Well, let’s take a look at some truths about credit….

1. You do need to have some type of credit accounts open, in order to build good credit…it can be a credit card (you really don’t have to have more than one), or a mortgage, or a loan.

2. You do need to use your credit accounts wisely, in order to build good credit…when possible only put on credit card what you know you can pay off in full each month, but, in an emergency or carefully planned situation, you can use credit to help you purchase something (e.g. a car), that you know you can pay each month.

3. Having good credit will help you when you are trying to complete other financial transactions (e.g. getting a mortgage) or sometimes even in situations, such as applying for a job.

4. Being cautious about how much consumer debt (e.g. credit card debt) you have, will help prevent you from getting in over your head…many of us have opened credit card after credit card and treated them like they were free money, not realizing the crippling interest rates we were getting into or how long it would take to pay them off.

5. If you are in over your head in consumer debt/credit cards, there are several ways to address the situation: stop using credit cards and only use cash, only purchase what you need (not what you want) until you get your spending under control, negotiate a new interest rate and payment plan with your credit card company, talk to a non-profit debt management company about how to get out of debt (if you don’t think you can do it alone).

Ah, we could go on and on, but there are so many others who have already done such a good job addressing this subject, that we will defer to them:

DoughRoller on Credit

Learnvest (women’s finance site) on Credit

CashCourse on using debit and credit cards

Even these are just the tip of the iceberg. We encourage you to do your own research into how to use credit wisely. Don’t be overwhelmed…one small change this week, can lead to a huge change a year from now. Go ahead – you can do it!