The following tips are in response to an e-mail from Money101 reader K. Bryant.
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No. 1: Pay your bills on time.Yes, it does matter. And down the road it can hurt you a lot more than just the late fees and penalties you face up front.No. 2: Don’t max out or move around. Pay off.“You don’t want to have $990 on your card if your limit is $1000 because that shows your creditor that you’re close to maxing out the cards,” said Scott Scredon of Consumer Credit Counseling Service of Greater Atlanta. “You want to make sure you pay off or pay down the debt instead of moving it around to other cards.”No. 3: Give yourself boundaries.“Crossing the 50-yard line is a penalty,” said Steve Bucci, author of Credit Repair for Dummies. “If you keep the balance below 50 percent of the credit limit, that’s a big plus.”No. 4: Idle doesn’t mean shut it down.If you have unused cards, it is actually better to keep them open. Closing them can hurt your score, according to Bucci.No. 5: Be selective.“Don’t apply for every credit card,” said Bucci. “Pick the card carefully; when you apply for new credit, your credit goes down in the short run.”
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