Clark Howard's Tips

Tips for keeping your credit score up

April 27, 2005

Clark read a "Market Watch" story about credit reports recently that caused him some concern.

It was about how much these reports influence your ability to get a car loan, a mortgage, car or home insurance and even the kind of job you get.

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Even worse, some questionable lenders are not reporting your good payments to the credit bureaus.

Or, in the case of credit card companies, they are not reporting your credit limit.

Therefore, it essentially looks like you're using too much of your available credit when you may not be.

So, when you get your credit reports look for what is NOT on there. That can be important.

Also, you can lower your credit score by a good 10 percent if you're using your home equity line at or near it's maximum level.

If you have a home equity line of $50,000 and you borrow that same amount, you score will drop fast.

Same thing with credit cards. If you're using more than one-third of the available credit, it could decimate your credit score.

There are also a lot of things that may appear on a credit report that shouldn't be there.

So, challenge anything that shouldn't be there. Also, closing old accounts could harm you. When you close an old account, you're taking away an available credit line that helps bump up your score. Until a card has been inactive for two years, keep it open.

There are tons of reports on us out there. Get acquainted with them!

More Clark Howard Credit and Banking Tips The dangers of home-equity borrowing  ID checks, minimum purchase rules a no-no with credit cards  The Mortgage Lender Implode-O-Meter  Advance-fee loans are back with a vengeance  Wachovia, WaMu say goodbye to option payment loans  Cycling your unused credit cards back into the mix  Banks offer diverging interest rates on savings and CDs  Mortgage bailout proposal to help banks, not homeowners  Credit limits being reduced without your knowledge?!  65 million paying for credit monitoring/fraud alert services  Full list