Taking control of your credit score

http://hereandthere.freedomblogging.com/2009/02/14/taking-control-of-your-credit-score/755/

Taking control of your credit score
February 14th, 2009, 1:48 pm · 1 Comment · posted by lgriffith
During a recent first-time homebuyer counseling session, a Justine Petersen representative told me how I can keep my credit score high (or for those with a lower score, how to raise it).

I thought the information to be relevant in regards to just about everyone - not just first-time homebuyers trying to fulfill a grant requirement, so I decided I should share that information with readers.

Here’s what I learned:

Imagine that a credit card with a limit of $10,000 actually has a limit of $5,000. Do not charge more than 50% of your limit to be safe.
Pay the minimum amount each month unless you need to bring your debt down to a manageable amount (then pay a significant amount more, not a few dollars more). Having a low balance is good.
Avoid having $0 balances on credit cards longer than 6-9 months. After that period of time passes and there has been no action on your card, the creditor no longer has to report on you.
Don’t cancel old cards if they have no annual fee and aren’t hurting you. You don’t want to lose that credit history, so you can instead charge a meal or a pair of socks on that card, let it cycle through, and maintain that credit. Cards that you’ve had more than a year are considered “established credit.” Cards that you’ve had for three years or more are even better.
On the other hand, don’t keep balances on so many credit cards that you can’t keep track of them.
Payments later than 30 days past due can drop your score 100 points in one fell swoop.
If a creditor calls and asks whether you want to raise your limit, say YES. But keep in mind, you only want to say yes for the credit increase to bring up your score, not for the actual ability to charge more. That can get you in trouble.
thecredittruth.org also had some interesting advice and information on credit scores:

What’s good and what’s bad?

750-850 Excellent - you’ll get any loan with the very best terms
700-749 Very good - you qualify for highly competitive interest rates
650-699 Good credit
600-650 Fair
550-600 Poor
Also from thecredittruth.org:

Fast facts on American credit habits
The average American has 13 credit accounts - 9 cards and 4 installment loans
Less than half of all consumers have ever been 30 or more days late on a payment
3 out of 10 have ever been 60 or more days late
Under 20% have ever had a loan or account closed by the lender due to default
40% of people carry a credit card balance under $1,000
15% have balances above $10,000
Almost 37% carry more than $10,000 of non-mortgage-related debt
The typical consumer has a combined credit limit of $19,000
1 in 7 are using 80% or more of their limit
Visit the site for more information about credit scores.