6 Smart Moves to Boost Your Credit Score

Cassandra Hubbart, DailyFinance If you think your credit score doesn't matter too much to you because you're not planning on getting a mortgage or applying for a credit card anytime soon, think again. Credit scores affect more aspects of our lives than you may realize (just ask these singles). That's why it's important to keep your score as high as possible. Paying your bills on time and staying well below your credit limits are the best ways to build and maintain good credit. Together they account for more than half of your overall credit score. A healthy payment history is the biggest contributor to your credit score, accounting for 35 percent of the total. Miss even a single deadline, and you could see your credit score drop as much as 100 points or more. To avoid those dreaded "overdue" notices and the credit blemishes they bring, set up automatic payments for any regular bills so that your lenders get the check on time, every single time. Another 30 percent of your credit score is based on the amount of debt you carry, as measured against the amount of available credit you have -- otherwise known as your credit utilization ratio. It's a good idea to keep your outstanding balances to less than 25 percent of the money available to you to spend. If you are not able to pay down your balances ASAP, you can go at the problem from a different angle by calling your lenders and asking them to raise your credit limit. But beyond these basic rules of smart credit management, there are some lesser-known strategies that can help you boost your score. Check your credit reports and correct errors. Of course, you want to make sure that everything is being accurately reported, from your current address to your closed accounts. (For more guidance on how to dispute an error on your credit report, look to this guide from the Federal Trade Commission.)