Tips for Improving your Credit Score and Keeping Credit Cards Open

There are many things that you can do to improve your credit score. Many people get caught in the credit card debt trap from an early age and struggle for most of their adult life to get out from under their enormous amount of credit card debt. As the debt piles up, the monthly minimum payments get bigger and it becomes harder to pay the bills. As such, you may get behind on your payments. High credit debt, late payments, and collection accounts are just some of the things that will ruin your credit score. As such, there are some things you can do to raise it up again.

If you can prevent it, do not close credit accounts. Many people close credit accounts they hardly use or that they just paid off to avoid the temptation of using the card again. This is a bad move because 15% of your credit score is based upon the length of your credit history. If you find that one of your cards is not in use, start using it for a very specific thing (for example, only buy gasoline/diesel with that one card) and use it for nothing else. By doing this, the card is in use, and the payment will be low. This way, you get to keep your lengthy credit history, and you are building points by making your payments on time.

You have to know that certain debts are weighed differently than others. Revolving debt is weighed more heavily in determining your creditworthiness. Revolving debt is money owed to a creditor who sets your monthly payment based on the current balance. This is different from installment loans, (such as student loans) where the amount owed is fixed (not based on your current balance), usually payable monthly, and almost never changes. Keep those revolving debts low and your score could increase.

Pay off your debts with consistent, timely, monthly payments. Doing so will help you maintain a good record of repayment and will ultimately boost your credit score. As such, do not fall behind in your payments, always avoid collection accounts, and keep your debt low.

Another great way to raise your credit score is by paying off high balances. This is easier said then done should you lack the financial resources to make such a payment. However, if you have the ability to pay off a credit card, you should. Maintaining a high debt to credit ratio is not good. You want to have a lot of credit and a little bit of debt. Ideally, your total debt amount should never be more than 30% of your total credit. Additionally, no one credit card should have more than 30% of its available credit line in use. As such, if you can lower your debt to credit ratio, you will see an increase in your credit score.

Follow these tips and you will notice that your credit score will improve.