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Step 1
In order to improve your credit score, always pay your credit card bills on card, and do not go over your limit. Going over your limit results in penalty fees and decreases your credit score.
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Step 2
Next, maxing out your credit cards will definitely not help improve your credit score. Carrying a big balance works against you. Try to keep your balance to less than 30% of your credit limit and this can actually help increase and improve your credit score.
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Step 3
Next, do not open any extra credit card accounts that you do not need. Having an extra credit card or canceling one can sometimes damage your credit score.
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Step 4
Make sure that you do not transfer all of your balances from a high interest card to one lower interest credit card. It is better to have smaller balances on a few cards.
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Step 5
Do not call your credit card company asking for a higher limit. This will actually hurt your credit score.
Comments
niknik2008 said
on 3/5/2009 Great Tip!
ACORN12 said
on 1/31/2009 You cover some good points here, but I have a couple of thoughts. Regarding the balance you should carry on your credit cards, my understanding is that to maximize your score, your balances should never exceed 10 percent.
I agree that you do not need many credit cards to build a good score (in fact too many may be harmful), but one thing you did not mention is that a major factor in credit scoring involves your mix of different types of credit lines in your history. Ideally, you should have a major credit card, a department store credit card and an installment loan such as a mortgage or auto loan.
Regarding your fifth point, I am interested in your source for this. Other than not having negative items on your credit report, the number one factor in one's score is ratio of your balances to the credit available to you. Thus, raising your available credit limit improves this importa