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Credit Management

Updated February 2, 2012

It's important to know there is a difference between Credit Management and Increasing your Credit Score. Overall Credit Management is a long-term approach to building and maintaining credit. Increasing your Credit Score is more of a short-term effort to increase your credit score marginally.

Ways to Manage Your Credit

1. Make Your Payments On Time - the best thing you can do for your credit score is to NOT have any late payments on your record
2. Manage Your Overall Debt - One of the largest point declines in your credit score with the new credit scoring system is having a very large ration of Debt to Available Credit. For example, if you have a total available credit across all of your credit cards of $5,000 and you have a $0 balance - then you are in great shape and probably using credit wisely. However if you have $5,000 in total avaialble credit across your cards, but have a total balance on them of $4,500 then that is bad and will reflect in your score.
3. Keep Old Accounts Open - Length of credit history is a big chunk of your credit score. Keep those accounts open especially the accoutns that are in good standing.
4. Only Request New Credit When Absolutely Necessary - Everyone is bombarded with requests to open new credit, from going to the department store to opening the mail there is always someone wanting you to open credit. Be very careful with any new credit requests. Always determine how you can handle things without credit and exhaust those options before applying for new credit.

These are just a few items to consider as part of your overall credit management strategy.