10 Ways to improve your credit score

We always hear about how important it is to have a good credit score. After all, even if you have a good score, an excellent one will get you better mortgage rates and save you more money. But what improves your score the most? What lowers it? And how can you budget your finances to get the highest score possible? Here are 10 ways to improve your credit score, and help you achieve your financial goals.

Don't open too many credit cards at once
Each time you open a credit card, the company makes an inquiry of your credit. Too many inquires in a short amount of time can lower your score.

Don't charge more than half the limit on your credit cards
It is better to have 2 cards with a limit of $10,000, and only charge $5,000 on each, than to have one card maxed out at $10,000.

Don't cancel credit cards once you get them
While it may seem like a good budgeting method, canceling a card will erase all of the payment history built up - which makes up a large percentage of your overall credit score. Cut up any cards you don't use, and maintain the lower the limits on them.

Pay your bills on time
Any payment later than 30 days is bad for your credit.

Diversify your debt
Don't have all of your debt in one type. For example, it's better to have $10,000 spread out among credit card debt, student loan debt, a car loan, and a mortgage, than it is to have the entire amount in credit card debt.

Only charge what you can afford to pay off each month
Monitor your credit score
Get the free reports 3 times a year at freecreditreport.com

Dispute any wrongful claims you find on your credit report
If you're unsure about specific lifestyle changes needed to improve your credit, check out Fresh Start
Be aware of your limits
Monitor your spending closely so you don't charge more than half your card limits