If you think you're doing everything right, take a look at the amount of your outstanding debt and your debt-to-credit ratio. Reducing your credit card balances will score you points and is especially important if you are flirting with the limit on any of your cards.
You never want to be maxed out, and ideally you'll
be using only about 40 percent of your limit on any one card. Spreading
debt between cards is better for your credit score than keeping it all
in one place.
Next, focus on the amount of outstanding debt (30 percent
of your score). Together, outstanding debt and payment history account
for 65 percent of your score. Pay off your debt rather than moving it
around. "A lot of people like to play the balance transfer shell
game. Closing out an account and transferring that over means that you're
increasing your debt ratio. You're reducing the overall amount of available
credit and driving up the balance on the other," says McClary. Ultimately
if the credit limit is equal or higher on the new card, it would be a
wash over time, but in the short term, this is not smart.
Tip: Discover 6 ways to get control of your cards.
