When looking into auto loans, or financing for a new house, credit is key. It is one of the main factors that play into this process. I used to work for an attorney who specialized in bankruptcy cases, so I have seen many people ruin their chances of having any credit for a very long time, just by making plain stupid decisions.

A simple, very effective rule to live by is to Live Within Your Means. I learned my lesson from watching people file for bankruptcy who were wearing Rolexes, living in mansions, and driving Lamborghinis. It’s plain to see, that it’s not very smart to finance luxuries.

With how easy it is these days to rack up your credit cards, and finance pretty much anything you want, it is also very easy to ruin your credit, without even noticing you’re doing it. The smart thing to do is to only have one or two credit cards at the most, and pay off the whole balance every month, not just the minimum fee. If you can’t do that, than you are definitely not living within your means and you may be headed for trouble.

Another very important thing to do is keep all your information private. Someone stole my brother’s identity and racked up thousands of dollars in debt under his name. Now he can’t even take out a student loan to help him through medical school. This was over a year ago and he’s still waiting on the court to settle his case, so they can wipe his slate clean and start from zero once more.

When working on building your credit, make sure all your car and house payments are on time, your checks aren’t going to bounce, and pay off your credit card balance every month, and your credit should always be positive and in the clear.