There are a lot of myths out there about credit, how it works and how to use it responsibly. For example, there are people who truly believe that it is better to never use credit at all. Maybe this is true for some people; particularly those who can afford to simply buy everything they want (including large purchases like homes, cars, and college educations) up front with cash but for the rest of us, our major expenses are likely to be funded through credit and loans.

This is why it is important to work hard to build a good credit score and to be vigilant about keeping your credit history pristine. Missed payments, overdrafts, an inflated debt to income ratio…all of these things will make it harder and even sometimes impossible to qualify for the funding you need. At the same time, having a lot of credit to your name but never using it doesn’t look good either. You need to use your credit and use it responsibly if you want to keep your personal credit score and history looking good. Here are some ways that you can do that.

Use Store Credit and Small Purchases

Store credit lines are great. They are a fantastic way to save money because a lot of stores will offer additional discounts to “members”. They’re also a fantastic way to build your credit history and prove that you can use credit responsibly. Best of all, almost anybody can qualify for a Macy’s card or other store credit lines.

Don’t let this line of credit go to your head, though! The caveat on the ease of attainment here is that the interest rates on store credit lines are often ridiculously high. Remember this before you start buying a whole new wardrobe!

The best way to use store credit responsiblyis to use your credit line for things you were going to buy anyway. Pay with your card and then, go home and watch your account. As soon as the sale shows up in your account, pay it off! You’ll prevent debt and interest accumulation and you’ll have a nice “pays as agreed” on your credit history.

PRO TIP: If you have a credit card that offers you points on purchases, this is a great way to build credit and points at the same time. Just remember: never charge more than you can already afford to pay off.

Go Slowly With Big Debts

It’s true: taking out student loans and automobile loans and then paying them down responsibly can help you build a great credit score and history.

It is also important that you not try to take on too many of these larger debts at once. Buy the car, get your student loans and then, when you have at least a couple of years of solid payments on your history, try to qualify for the mortgage.

Why?

Because, for very large loans–like the kind you need for homes or starting up businesses–banks pay very close attention to your debt to income ratio. If your debt payments take up more than 30% of your income, no bank is going to lend you the money you need for that large purchase. Plus, if you have a lot of large debts associated with your name, any creditor worth her salt will think that you are trying to do too much too quickly and will likely turn down your application anyway, even if you’ve never missed a payment on anything.

Be Careful With Balance Transfers

Let’s say you have a lot of smaller debts and trying to pay six different credit card bills is eating away at your soul and destroying your bank balance (six interest payments a month will tend to do that). You might be tempted to take out a consolidation loan to reduce the amount you owe as well as the number of payments you have to keep track of.

This is certainly an option and, if you are good with credit, you probably won’t have any trouble getting the loan. Remember, though: shifting debt from one account to another doesn’t erase it from your credit history. That debt will still show up on a report. Consolidating once probably won’t get you into too much hot water, but if your history shows a lot of debt shifting, your score is going to take a hit.

Credit Repair: Good but Not the Holy Grail

Sometimes in spite of your better efforts, your credit goes south. Maybe you get hit with a huge medical bill or lose your job and fail to pay your student loans. As soon as even one account gets sent to collections, you’ll be inundated with phone calls from collection agents and people offering to solve your credit problems for you.

First, make sure you know how to handle those terrible collection calls. It’s important to know your rights before you pick up the phone.

Next, make sure you understand what credit repair agencies can and cannot do. Any agency that promises you that they can raise your score by hundreds of points within a week or two just wants your money. According to Lexington Law reviews, it can take anywhere from a few months to a year to clear up a troubled credit history.

It is totally possible to repair your own credit, especially if you’ve kept good records, are good with details and understand how the process works. For many people, hiring help is the better way to go. Just make sure to research and vet each candidate thoroughly before signing any contracts or paying any fees.

Remember: if you want to build up your credit, you have to use your credit. This article should help you get started with that. Just remember: always use credit responsibly!