4. If you have any recent delinquent accounts, get them paid up as soon as possible. Recently late payments affect your credit score more than late payments from many years ago. You can’t change the past, but once you get all your accounts current, keep them that way. Your credit score will eventually improve after showing a long history of making payments on time.
5. Keep balances low on credit card and other revolving debt. Your credit score will be higher if you show that your can use credit responsibly. Using a small portion of your available credit shows that you are smart in your spending and will be less likely to take on more debt than you can afford. Avoid “maxing out” your credit cards, which makes it look like you can’t control your spending. It’s actually best to try to keep your balance under 30% of your limit.
6. Using your credit card responsibly is better than not using them at all. Use your credit cards wisely and pay them off each month. Just having the accounts open but not using them won’t help your establish a healthy repayment history.
7. Closing accounts you don’t use can hurt your credit score if you are carrying a balance on other credit cards. Part of your credit score is determined by your credit-utilization ration: that ‘s how much credit you are using compared to how much credit you already have available to you. Let’s say you have three accounts with a total credit limit of $15,000 and you carry a balance of $5,000, using 33% of your available credit. If you close your zero balance account and only have $10,000 now available, you would be using 50% of your available credit. Closing the accounts you don’t use will increase the credit utilization ratio, lowering your credit score.
To be continued…..