10 Ways to Improve Your Credit Score

Deciding to spread your credit card debt among several cards might help your credit score, however, before adopting this strategy, calculate the interest you'll be paying and compare interest rates between cards. In some cases, you may save money by consolidating your credit card balances onto one low-interest card, as opposed to having that same balance spread over several higher interest bearing cards. Do the math to help you make the decision and take the action that's best for you.

Strategy 3: Having a Good History Counts, So Don't Close Unused Accounts. One of the factors considered when calculating your credit score is the length of time you've had the credit established with each creditor. You're rewarded for having a positive, long-term history with each creditor, even if the account is inactive or not used. The longer your positive credit history is with each creditor, the better.

Knowing this, avoid closing older and unused accounts. If you have a handful of credit cards you never use, instead of closing the accounts, simply put the credit cards in a safe place and forget about them. Although you don't want to have too many open accounts, having five or six credit card accounts open, even though you only actually use two or three cards can be beneficial. Likewise, if you have a five-year car loan, for example, showing three, four or five years of positive payment history (with no late or skipped payments) will benefit you.

Strategy 4: Only Apply for Credit When It's Needed, Then Shop for the Best Rates on Loans and Credit Cards. If you're in the market for a bunch of new appliances or other big-ticket items, it's common for consumers to walk into a retailer and be offered a discount and a good financing deal on a large purchase, if they open a charge or credit card account with that retailer. Before applying for that store's credit card, read the fine print. Determine what your interest rate will be and what fees are associated with the card.

Next, only apply for new credit if you absolutely need it. Applying for a retail store card you're going to use once or twice, when you could just as easily use an existing credit card, might not be the best idea. Applying for and obtaining multiple new credit cards (including store credit cards) within a several month period will be detrimental to your credit score. Unless you can save a significant amount of money on your purchase over time and can justify accepting a reduction in your credit score, don't apply for credit you don't actually need.

Strategy 5: Separate Your Accounts after a Divorce. During a marriage, it's common for a couple to obtain joint credit card accounts and co-sign for various types of loans. Coming into the marriage, the information on each person's credit report and their credit score will eventually impact their spouse, especially when new joint accounts are opened or a spouse's name is added to existing accounts. Consolidating all your accounts once married makes record-keeping easier. If a couple gets divorced, however, this can create a whole new set of credit-related challenges.