Tips to keep your credit score high

March 25, 2009 6:28:54 AM PDT
With an economy that keeps so many people short of cash, a good credit rating can be crucial to making ends meet. SIGN-UP: Get breaking news sent to you

Having the highest score pays off - not only in sports. The same is also true of your credit score. But there are many reasons your credit can take a hit.

Finances can be a lot like football; credit card company lowers your limit offsides -- five-yard penalty; you charge more than 30 percent of your credit limit Holding -- 10-yard penalty; you make late payments or don't pay at all -- interception, lose control of the ball. But even underdogs can come back.

"You have to start paying those bills on time, you have to make sure you're not going out and applying for massive amounts of credit in a short period of time, and you've got to keep the balances on those cards as low as you can," said Steven Katz, TrueCredit.com.

Computers control that powerful three-digit number that determines whether you get a mortgage, car loan, or credit card. Sometimes there are mistakes; Warren Crest found someone else's unpaid account on his credit report. Removing that error raised his score 128 points. Part of the calculation for your score is the debt you have versus the amount of credit you have been approved for. So watch out for credit card companies lowering your limit.

"Lowered limits are done by a computer, so if you can call and speak to a real human being, it's very possible you'll get that reversed," said Elisabeth Leamy, GMA Consumer Correspondent.

Dormant accounts are the first to get cut or cancelled, so if you want to keep your card, use it at least once a quarter. Every time you apply for credit, your credit gets checked - too many credit inquiries can lower your score. Always pay on time, even if it's the minimum amount - after 8 to 16 months, you should see improvement.

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