From Here to Financial Happiness

Day Thirty Nine Running Up the Score

Because credit scores are so important, you want to nurture the highest score possible. Some of the steps involved aren't obvious, but most are – and they're the sort of thing you ought to be doing as a prudent manager of your own money. Here are six strategies that can help your credit score:

1. Occasionally check your credit reports for errors.
2. Pay your bills on time, especially loans and credit cards. Lenders are particularly quick to report late payments to the credit bureaus.
3. Keep your total monthly credit card charges to 10% or less of each card's credit limit. This is important, even if you plan to pay off the balance in full. Why? If you use a high percentage of your credit limit, the credit bureaus take that as a sign that you're under financial stress.
4. Don't close credit card accounts you don't use. Doing so will reduce your available credit, so your borrowing on other cards will be higher as a percentage of your remaining available credit line – and that will make you appear more financially stressed.
5. Don't apply for credit more often than is absolutely necessary and don't open too many different credit card accounts in a short space of time. If you're in the market for, say, a car loan, try to concentrate your applications within the span of a few weeks.
6. Use a mix of credit cards and car loans, mortgages or other installment loans. This can help your credit score over the long haul. But don't borrow just to raise your credit score. ...