How to improve your credit score (or maintain it)

On-Time Payments - Making payments by your due date is the most important factor, consuming 35% of your total FICO score. even 95% on time payments would be considered bad.

Hard Credit Inquiries - When you apply for a credit card, auto loan or mortgage the lender checks your score from a credit bureau called a hard inquiry. These deduct 5-10 points for up to a year.

TIP: When stores offer you a store card, consider the cost/benefit ratio. Kohl's offers you 20% off just to see if you're approved (sounds enticing), but will apply a hard inquiry to your profile.

Total Accounts - The more accounts you have the better but when lenders look at this value, the 'what if' of utilizing all your credit and potentially going into debt could hurt your ability to borrow

TIP: Do not open multiple cards at once. This will look bad to lenders and decrease your score due to the lowering of your average age of accounts and accruing hard credit inquiries.

Average Age of Accounts - The longer your accounts are open, the more it'll benefit your score. A new card will negatively affect this factor. Closing a card will hurt you, especially the older it is.

TIP: Opening a new account will lower your average age of credit lines, will apply a hard inquiry but increase your total accounts. Proper use of this account will benefit you overtime.

Credit Utilization - Spending between 1% and 20% of your total credit is the sweet spot. Say you have one card with a $2,000 limit, spending $20 - $400 a month will improve or maintain your score.

TIP: If your utilization rate is far above 20%, consider raising your credit limit on that acct if opening a new account may not be best for you right now. Spread your spending across all your cards.

Derogatory Marks - Bankruptcy, defaulting on mortgage payments, accounts sent to collection agencies, unpaid tax liens and unpaid monetary legal fees will drastically lower your score.

TIP: Be leery of transferring balances across accts with 0% interest for an introductory period in order to avoid paying the balance. This could get you into a mess by owing once the period is over.

Credit Diversity - Lenders consider your different types of accts. (credit card, store card, car loan, mortgage & installment loan). You'll be viewed as more 'well-rounded' having a variety of credit.

TIP: Opening an account in your child's name and using that account for yourself until said child is responsible enough will start your son or daughter off with good credit.