Fixing your credit score

NBC
Published: October 14, 2008

In these tough economic times do you know everything you can about all those credit cards in your wallet? 

Probably not, so here are some facts tips that can improve your credit score.
On average, Americans have more than 9 credit cards each, and boy have they used them!
They and many others are looking for a way to stop the bleeding, but did you know it’s not a good idea to cancel your cards. 

That can actually hurt you on your credit report, according to Leslie McFadden of bankrate.com

“I wouldn’t recommend canceling cards unless you have a sound financial reason to do so. A sound financial reason would be if you have a high annual fee you’re paying,“ said McFadden.

You’re next thought may be to consolidate your debt on one card, but did you know you have to be careful which cards you choose?

You need to make sure the card not only has a low interest rate, but a very high, high ceiling. 

You don’t want to go near the credit limit and here’s why.

“If that’s a low limit and you’re using more than 30 percent of your card’s limit, it’s generally not a good idea.  That can impact your credit score,“ said McFadden.

Accordingly, it’s better to spread your debt around among several cards and then start paying off one by one.

“When you just have credit cards that you’re not using, that you’re only using occasionally that can really help your credit score,“ said McFadden.

And if you must buy something do it the old fashioned way.

“If I can’t pay cash for it, then I won’t buy it,“ said one shopper.

In addition, don’t put all your debt on one of those rewards cards just to get the free air miles. 

You need to be able to pay off that card each month. 

These typically have higher interest rates, so carrying a balance is a bad idea for starters and secondly, if you get too near the credit limit, the bank may raise your rate or lower the ceiling.