Most people look up matters that pertain to their credit score only when it becomes bad enough to be noticed and acted upon by creditors. Even then, the focus stays on improving the score and repairing the credit report rather than finding out what went wrong where. It is very important that you know what really harms your credit report most so you can work at keeping the damage to the minimum even when the circumstances are trying. IT is also important that you learn early how to manage your finances in such a manner that you will stay off trouble.

Here are five points that you should try as much as you can to keep off your credit report:

1. Bankruptcy – this often looks like a great relief to you when you're surrounded by financial chaos. However, you need to know that bankruptcy will stay on credit report for at least 7 years – and this will be visible to your prospective creditors. This is a very long time by any standards. You might like to consider all possible alternatives before declaring bankruptcy. It will be worth the trouble.

2. Foreclosure – this is the term used for the process when a bank repossesses your home because you can not keep up with the payments of the mortgage. This is another negative remark that harms your credit and stays on your credit report for a minimum of 7 years. Any prospective lender who sees that you have a foreclosure on your credit report will immediately list you as a high-risk investment. The terms for credit will be adjusted accordingly – and this will not be to your advantage.

3. Debt collection – debt collections means you have defaulted with your payments long enough for the creditor to hire a debt-collection agency so they can recover their money. This is – as you will realize – not something very encouraging for any future creditor to see on your credit report. This entry tells them that you're not able to manage your finances well enough to be able to honor your commitments. In such conditions, no creditor will be happy to be associated with you.

4. Lawsuits – in some cases creditors may appeal to court for recovery of their debts. In case a judgment is passed against you, this will be entered into your credit report and kept there for seven years. Needless to say that this is very damaging to your credit score and standing with creditors.

5. Tax lien – this refers to the taxes you ought to pay for your home or any similar property. In case you fail to pay your tax dues, the Government might auction your property to recover these taxes. Unpaid tax liens remain on your credit report for 15 long years. Even when your property is auctioned for recovery of taxes, you will still be responsible for timely payment of the mortgage until fully liquidated.

You need to work hard to keep these entries off your credit report. These can harm your credit score and sabotage your ability to avail loans as the creditors will perceive you as high-risk investment. This is why prevention is better than cure – learn to manage your finances well so you will avoid the pitfalls of bad financial management.

Youth is a very intoxicating time – beautiful, dangerous, and all too short. Most young people tend to believe that one should live for today and let tomorrow take care of itself.

This is a good principle, if you don't plan to live very long! However, if you wish to live until a ripe old age and wish to be financially self-reliant and carefree, you need to take some important steps even as early as your twenties.

1. Invest in yourself – it's great fun to go to parties over the weekend, or to throw some yourself. However, it's wiser if you use some of this free time you get over the weekend to earn an additional degree or complete a diploma or certification course in the profession you chose for yourself, or in allied fields.

The more qualified you are, the higher the price-tag you will command when you apply for a job. Education and experience are the two vital components that demand a high salary.

2. Negotiate – learn to negotiate for a better price, better terms and conditions for your loan, higher salary, better perks, a better discount, and so on. Young people usually take pride in the fact that they can afford to pay a higher price than is required. Do not be counted among this group!

There is no pride in parting with your hard-earned money when the same stuff can be bought for less. This is rather foolish. Perfecting negotiating skills takes a lot of time, and it would be a good idea to start as early as you can.

3. Drink plenty of water – this is definitely better than beer, coffee, tea, soda and a few other similar beverages. Besides, it costs nothing. Make it a habit to carry water with you wherever you go, and when you develop an urge to drink any of the above, have about 5-10 sips of water and you will be surprised at how fast the craving disappears.

4. Do your work as much as possible – share household chores among the family members and do away with the cleaning personnel, lawn mowers, and so on. You will save a small fortune by the end of the month if you just plan and have your laundry washed and ironed at home instead of sending it to the cleaners.

5. Cook food – fast food, party dinners, sandwiches on-the-go are okay once in a while. However, in order to stay healthy both in body and mind, you need to eat home-cooked food.

Forget about microwavable pre-cooked and processed food, and change to home cooked dinners (at the very least). Not only you will save a tidy sum on food bills, but you will also avoid excessive weight gain and other health problems.

The habit of saving is one of your greatest allies; one that needs to be nurtured carefully as early in life as possible. If you instill this habit in your character, there is very little that can affect you negatively in regard to your finances.