Sadly, there is no quick fix to establishing and building positive credit. Because healthy credit practices aren’t normally discussed in homes or taught in public schools, many Americans don’t understand how credit works and struggle to establish and maintain positive credit scores and credit history.

Poor credit scores can cause hugely inflated interest rates when purchasing cars and homes, denials on personal and business loans and even determine eligibility in leasing and renting homes. Positive credit, however, offers a myriad of unimaginable financial freedoms.

So whether you are burdened by negative items on your credit report or just starting out and attempting to build positive credit from scratch, here is a breakdown of seven simple steps to establish and reestablish positive credit.

Review Your Credit Reports and Credit Scores
Three major credit reporting agencies– Equifax, Experian and TransUnion– issue credit reports, and federal law requires them to issue one free copy of your credit report annually upon request. Also, many banks, credit unions, reputable websites and card issuers give them to customers for free.

Examine every line of your credit report to ensure everything is correct and accurate. If there is an error, the credit reporting agency must correct it at no charge, which could in turn result in positive credit.

Additionally, look for negative items on your credit report older than seven years. By law, negative items must be removed from your credit report after seven years or after 10 years with some liens and bankruptcies.

Monitor Your Credit Closely
No one has the time to watch their credit score 24/7. But identity theft, financial fraud

and credit-report errors can be murder on your credit score. So it would be wise to regularly check your credit. Many services, such as WalletHub, offer free 24/7 credit monitoring and will alert you of any changes to your TransUnion credit report.

If you notice any inaccuracies, fix the problem immediately. The longer it takes to address the issue, the worse it will become.

Protect Your Existing Accounts
Do not close out existing credit card accounts. Older, active accounts can boost credit scores. But be sure to not max them out.

If the cards are burdensome, however, simply stop using those cards until they are completely paid off. During months when you may have become financially strapped, pay the required minimum and pay it on time.

If you have cards that require usage, charge small, inexpensive items then pay the bill in full the following month. Some credit card companies will close your account after long periods of inactivity. If you make a credit card payment that is less than 30 days late and you do not have a history of late payments, your credit will not be damaged.

After Positive Credit Has Been Established, Apply For New Credit

Most times, poor credit is a result of credit cards. But just like bad credit card habits can impair credit scores, using credit cards wisely can boost your score. So after credit has been repaired a bit, consider getting one or two new unsecured secured cards with no annual fee. If you are turned down for an unsecured card, consider a secured card. With this card, there is an upfront deposit used as collateral. Then, it works like any other credit card.

Before applying, make sure that the card reports monthly to the credit bureaus. Otherwise, it will not help improve your credit score. Also, look for a secured card that would eventually convert to an unsecured card after a specific period of good payment history.

Be Cautious When Applying For Lines Of Credit
Simply having a credit card, making payments on time and paying off the full balance monthly will help build credit. Card companies report account information to the major credit bureaus each month.

When selecting a credit card, however, choose wisely. Each credit card application causes a “hard inquiry” into your credit history. So apply only once. Repeated inquiries, especially denials, lead to temporary damage to the credit score.

So try to apply only once for a card that has no annual fee. If you don’t get approved, pay a deposit for a no-annual-fee secured credit card and each month, pay off the full balance of what was spent in the previous month.

Practice Good Credit Habits
Human beings are creatures of habit. From eating to exercising, buying to spending, we all have a tendency to follow many of the same patterns in our daily lives. Establishing and keeping positive credit is no different.

So make payments on time. A large portion of your credit score is based on on-time payments. A great way to do this is setting up automatic monthly payments from a bank account scheduled just after payday. Also, pay off the full credit card balance each month. If the balance is not paid in full, interest will accrue.

Be Consistent
Consistency is the key to building and maintaining positive credit. So only spend and borrow within your means, and keep all accounts open and in good standing. Simply having an open line of credit that is in good standing helps to build upon positive credit.

Also, remember to budget and save. It takes less than an hour each month to plan how monies will be spent and saved. And make sure to set aside room for an emergency fund. This will give you a financial safety net in the event of unexpected expenses or loss of employment. Your goal should be to save two months of pay per year and increase your savings until you have put away a year’s worth of pay.

Building and rebuilding credit is a slow process but it is well worth it. The rewards are better rates and thousands of dollars in interest savings. But it won’t happen overnight. It can take 60 to 90 days or longer before seeing significant improvements in your credit score.

Depending on the severity of credit scores, it can take years to achieve first-rate credit. However, the sooner you devise a plan to better your credit situation, the better. So be patient; be diligent, and you’ll