A bad credit history or bad credit habits will place “black marks” on your credit profile. These include things such as late payments, having an account assigned to a collection agency, and of course bankruptcy.

Establishing good credit habits and therefore a good credit rating will improve your credit worthiness. This will be reflected in potential lenders offering you substantially lower interest rates and better deals on credit offers.

Here are 4 tips to help you create a shining credit profile:

1) Pay Your Bills On Time

Lenders only have your past payment history on which to decide type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.

2) Don’t Use Too Many or Too Few Credit Cards

How much is too much ? How little is too little ? Many credit experts and financial planners suggest two to four credit cards is just right mix.

The obvious first step to paying off credit card debt or paying down credit debt load is to cut back or eliminate use of your credit cards. For some people this first step can often be most difficult. If you’re used to spending freely with plastic and worrying about consequences later, it’s difficult to break free from this “buy now, pay later” attitude.

To gain control of their careless credit card spending habits, some people cut up their credit cards therefore making it impossible to use them. Others lock up their credit cards or hide them in a safe place and vow to use them only in an emergency.

The second step to paying down credit debt is to pay more than minimum balance due. Most credit card companies require a minimum monthly payment of 2.5% of outstanding balance. For example, if you have an outstanding balance of $1100.00 on a credit card charging an Annual Percentage Rate (APR) of 18.9% your minimum monthly payment would be $27.50. It will take you 66 months or 5.5 years to pay off your balance of $1100.00 making minimum payments. The credit card company will make $676.94 in interest from your use of their credit card.