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How To Keep Your Credit Healthy

3 Key Steps To Healthy Credit

I compared good credit to living a healthy lifestyle in my post about Credit Development.

My father had a heart attack in 1999.

He needed serious preventative measures to change his lifestyle so that his health would no longer be in danger due to the bad habits that contributed to heart disease.

Credit Health is preventative care for your credit.

Bad habits with credit payment schedules, acquiring new credit debt and treating it as new income, and high month-to-month utilization on credit cards are some of the factors that cause credit disease.

After college, my income was low or limited.

A bill came due that was a challenge for me to pay.

I applied for a credit card to help with the payment.

I didn’t realize that what I was doing was causing myself more harm than good.

The credit card comes in the mail, you pay the bill with the entire balance of the card, and put it in your wallet with your 14 other cards that you can’t use.

Instead of looking for ways to make the cards we have work for us, we get caught in the trap of using credit like income and piling on more and more debt.

So where do you learn good habits?

Credit Health is Preventative Care For Your Credit

It may seem easy to say, “The answer is not to have any debt!”

But I challenge you to consider that the answer is to convert your bad debt to good debt.

Think about it. Would a good answer for my father’s health problem to have been just to tell him to stop eating?

Was the option to “stop living life” really an option for him?


My father had to change his habits and change his lifestyle to encourage good habits and reverse the effects of heart disease.

You can reverse the effects of bad credit by changing your habits and encouraging good habits to reverse the effects of credit disease.

Change your habits so that the debts you incurred pay you back and pay themselves instead of taking money out of your pocket.

At first, to get your balances back to normal, you need need to use money out of your pocket to recover.

But after you have recovered, you will no longer need to use your own money.

By the way, if you’re interested in reversing bad credit and turning your bad debt and bad habits into good debt and good habits, read this post.

Here are the 3 Key Steps to Healthy Credit.

  1. Give your personal credit a greater purpose. Setting money aside for emergencies is easily accomplished (see step #3). You don’t need a credit card to do this. It is okay to use your credit card for incidentals while building a credit line because you want to pay your card off every month you make that minimum payment (You’re welcome.) But don’t make that the purpose of owning the card. Make your credit card’s purpose to be used as collateral toward income producing purchases because that is where your debts pay you back
  2. Get organized. Here are some tools that will help you get organized with your credit accounts:
    • Spreadsheets – These will help you organize the accounts, due dates, interest rates, and balances owed. When you write this down, you will have a clear picture of what you’re working with. You can create spreadsheets for many purposes, here are a few.
    • Binders with pocket folders and tabs – Label the tabs, one for each month. Use one pocket folder for each month and put all of your statements and your worksheet for that month in the folder. Here’s a great way to create and organize a money management notebook.
    • Apps for your smartphone – Look for apps that will help you budget your money and help you dedicate funds toward reducing your utilizations without harming your other bills. YNAB is a great one.
  3. Create accounts for different purposes. Bank accounts are great tools because they help you organized your money.  You can make separate accounts for the following:
    • Groceries
    • Emergency fund
    • Automatic payment for bills
    • Entertainment
    • Fuel for your car

Accounts like these will make it easier to manage a habit to budget your money when you get income.

I hope that this article helped you. If you have any questions about keeping your credit healthy or you’ve done a review of your own credit health and want to talk about it, leave me a comment below.


If you are interested in starting the approval process off with raising your credit scores for free, I invite you to take my free, four-part, Dispute Letter Mastery Course.

In this course, you will learn how to update your personal information, dispute information that has errors, and delete negative information in order to raise your credit scores 50 – 75 points in only 45 – 60 days. A boost like this can really make a difference in your interest rates, and it is all free.


  1. I do not have much knowledge when it comes to credit card except that I applied to one and own a one. I use it from time to time just for the purpose of building a credit, but as soon as I use it I’ll pay it off. I do have a good credit score and I’m not much of a spender either. So are there any ways that I can benefit more from having a credit card for a guy like me who does not spend much but I’ll only use credit card from time to time to build credit and pay it off right away? Thank you.

    • Hello Joon,

      Thank you for your comment and question. In order to quickly raise your credit scores, keep how much you use on your card very low, under 35%. With FICO scores over 750, you can save thousands of dollars per year by lowering your interest rates and paying lower prices per month on things you finance such as your car and your mortgage. Once your credit scores are raised, look into using your credit as leverage to purchase property and other investments that will pay you every month or every three months. This will protect your income by replacing the income you receiving with income you don’t have to be there to acquire. I hope this helps!


  2. Very informative post. I’ve never had any credit problems myself but I do know people who do and this post is something I think they should read.

    It can be very easy to get sucked into the trap of credit so it’s very important that people be proactive and have a good sound strategy for dealing with it.

    • Hi Eric,

      Thank you for your comment. And you’re right – applying for credit and using credit without a sound purpose or strategy can be a trap. I see people struggling without a strategy for their credit use every day, and it is really tragic. If you meet anyone who asks questions, this could be a great place to refer them to.


  3. I like what you said in this post a lot. It is a very troublesome trap. I wouldn’t take any loan whatever the promises of the coming investment is.
    So, I have a rule to never take a loan to anything except if I had to, like a health crisis or something like that.
    I wouldn’t put myself in debt to make an investment. I prefer taking any financial risks by my own money.
    I am credit healthy now :)

    • Thank you for your comment, Mahmood. I always tell my clients that their credit is meant to serve a purpose. If you have a picture in your mind of the life you want to live, your credit is the collateral to make your dreams happen. With that in mind, if you have goals, seek to reach them. If you don’t have any goals, create them. Your credit is just a tool to help you get there. Use it responsibly and it will serve you well. :)

  4. I wish I had read this article on how to keep your credit healthy years ago.

    How to manage money should be taught in school at a very early age, but instead we are encouraged to borrow money, which is like teaching people it’s okay to live beyond their means. It’s insane.

    Learning how to keep your credit healthy is essential if you hope to avoid being a debt slave. Well done!

    • Hi G. C.

      Thank you for your comment, it is appreciated.

      Although one of the big financial pushes in the media is to stay away from debt altogether, I provide a different way of looking at debt.

      I am against acquiring debt for debt’s sake, where you spend your hard earned money from your job to maintain a debt that just puts you into more debt.

      The type of debt I advocate for is borrowing other people’s money as collateral for investments that are assets to your life. They create money and pay off their own debt without you having to use your private income to pay it off. You’re happy because the borrowed money is paying for itself and paying you a profit at the same time, and the lender of the money is happy because he or she is getting paid back on time for what they lent.

      So debt that you acquire that does nothing for you is absolutely bad. Debt that pays itself and pays you is absolutely good, and once it is paid off it is all profit to you.

      Only go into debt if it pays itself and pays you. Otherwise, it is bad debt.


  5. These are some great tips for keeping your credit healthy. I really like the idea of using multiple bank accounts.

    For a while I was trying to pull out cash for different expenses and keep them in separate envelopes but this was not always practical and a lot to keep up with.

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