The typical American consumer applies for credit less than twice a year. It's good, in this case, to be typical when you're just starting out. Open one, or possibly two accounts, but don't open half a dozen, at least in the first year. Stay within your means so you don't fall behind in making your payments. And, by all means, use the credit. If you're a college student and you've opened a credit card for the first time to help pay for those incidentals during the school year, by all means, use the credit card but try to use it moderately. My advice is: take it slow, stay within your means, use the credit and keep your account balances low.

For those just starting out, is it a good idea to use credit "sparingly" or every month?

Anyone interested in getting a great credit score should use their credit sparingly. By sparingly, I mean using it at least once every several months. If you don't use it at least that often, the creditor is likely to put your account in the inactive file or close it outright. That's not going to help your score. You want to maintain an active account with the best standing that that creditor offers.

First get current with any accounts that are in arrears and stay current. That might mean contacting your lenders, explaining why you're four months late. In many cases, creditors will negotiate with you for a longer payment period because they really want their money. If they think they'll have a better chance of getting paid by negotiating better terms, they'll do that. So, get current, stay current with your creditors -- that will immediately start helping your score.

Rebuild your credit 1. Open one credit account. 2. Use it. 3. Pay on time. 4. Keep balance low.

Open one new credit account and keep the balance low. If you've gone through a bankruptcy or had a similarly extreme situation, you want to get back on the horse again, which means open one credit account -- and likely, it's going to have a low credit limit or a high interest rate, but open it anyway because you need to re-establish a good track record. You need to show future creditors that you have in fact, still got good credit habits and you are a responsible consumer. Creditors will only trust that when they see it in your credit report history. Do this immediately and in a surprisingly short amount of time you can improve a bad score by consistently demonstrating good credit practices. "Surprisingly short" to me means two to three years. But it means getting current with your creditors and never being late again. Keeping your account balances low and only taking on new credit sparingly.

You'd think you should stay away from credit for awhile until you've learned your lesson or until the irons have cooled a little bit, so they don't burn you. But in this case, the sooner you can get back into the game of managing credit and demonstrating good habits, the sooner you're going to begin restoring your credit reputation.

The one that surprises people the most, especially if they have a terrific credit score, is the impact that a single report from a creditor of a payment delinquency can have on a person's score. We have an adage here, "The higher a score, the farther it can fall." And in fact, that's true. The higher your credit score, if suddenly on your credit report a collection account appears or you're reported as being 30-days late paying a creditor, your score can drop by 100 points or more overnight. That's not necessarily going to happen to somebody who has a low score because their score doesn't have as far to fall.

So the recommendation for somebody with a high score is keep doing what you've been doing. The people with the very highest FICO scores tend to be people who have few credit accounts, they are never late with payments, they use the accounts very sparingly and they pay off the balance every month. They are almost immune to offers from lenders for enticement rates or refinance offers because they're very sparing in the way they approach the whole credit industry. So, they're not very interesting stories, but to lenders, they're like gold because they're the most trusted of borrowers. It's frustrating for lenders because they're also one of the hardest groups to entice into applying for a new card or a new loan.

Any last words of wisdom for those looking to improve their credit score?

Be thoughtful, rather than impulsive. That's the path to wisdom is so many parts of life, and it's certainly the path to getting a great credit rating and a good credit reputation. The kind of impulse opportunities that we all receive -- zero percent introductory rate on a credit card, or 10 percent off on this purchase at a department store checkout counter, if we just take out that department store's credit card -- if we would resist those impulses, and instead thoughtfully consider how we manage credit before we use it, as a nation we would have much better credit ratings, and frankly, we'd probably be happier with our money.