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Financial Literacy - Credit scores
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5 tips to improve your credit score
Learn strategies for fixing a less-than-perfect credit score with a little time and elbow grease
Credit scoring, demystified

5 tips to improve your credit score

If you've pulled your credit score and are disappointed by what you see, here are some simple things you can start doing now to improve your score. Credit counselor Bruce McClary of Richmond, Va., suggests these five ways to boost your credit score.

5 ways to bump up your score
Commit for the long haul
Fifteen percent of your score is determined by the length of time you've held a credit relationship. Don't close any accounts if you plan to shop for a mortgage or other loan for which you'll need a good score. Opening new cards and closing old accounts negatively impact your credit score in the short run, so avoid making these moves shortly before applying for a large loan. Deciding when to close an account is a tough question, says McClary. "It depends on the overall mix of credit and how many accounts you close. I would stagger it out. Put as much time between those events as possible, because it will affect financing terms," he says.

While you'll want to have a couple of cards to develop a credit history, adding more credit card debt can be a dangerous thing, McClary cautions. "Limit the amount you get to two and keep balances low and pay them off quickly. It's not necessary to have more than a couple of credit cards, and be careful using them because life circumstances can change." Of equal importance is establishing a savings account to fall back upon.

Tip: Listen to this 60-second tip, "Cancel a card, hurt your score."

 Does your credit get high marks or do you feel like
you're flunking out? Share your story.
-- Posted: June 18, 2007
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