It is absolutely clear and well defined that if you use your credit less often, you will earn good credit in return.

The company that paved the way for credit scoring (FICO scores), Fair Isaac Corporation, has produced data demystifying the numbers regarding the not-so-good credit and excellent credit. The population in the US with FICO scores over 620 sub-prime thresholds hover around eighty percent; however, the percentage of individuals with 700 or higher scores is roughly fifty-eight percent.

Lenders apply mixed rules in the use of the credit score. There’s some sort of slippery slope in the application of the rules. In short, a lender has his or her point of view. It is very beneficial to learn the cardinal rules and abide by them, if you intend to maintain excellent score:

1. Do not consider opening or closing accounts just when you are about to apply for a major loan, like mortgage or auto loans. Unfortunately, that’s exactly what a lot of people do, hoping that it will raise their credit score. Closing accounts will not improve your credit score; it could damage it.
2. Applying for credit card when you don’t need it, is a terrible idea because you will be tempted to use it. Most importantly, it can affect your credit rating negatively. Credit Scores and credit reports assist lenders figure out if you will pay back their money. Opening additional accounts implies that, at any time, there’s a high probability you can rack up more debt. You stand the chance of being considered a riskier proposition.
3. Avoid spending closer to credit limit. It makes lenders uncomfortable. That’s because you spend the same amount on all your credit cards but have less credit available. The less the available credit, the worse the impact on your credit.
4. Paying off your debts each month assists you financially in a number of ways. It reflects well on your credit and it saves you the interest. Additionally, if you are ever using more credit than you can pay off in one month, that’s an ugly cautionary sign of danger flashing that you’ve left your financial comfort zone.
5. Avoid paying your bills late. Late payments foretell monthly problems, which predicts you as a higher risk. That’s why they damage your credit. Also, if you are late with one card, there’s chance another lender could see you as a potential problem and then raise your rate.
6. Read the bill when it arrives and dispute any errors immediately. You’ll have more options and won’t be sending in what looks (to the lender) like a partial payment.

With online bill pay, it’s even a lot easier to ensure the payments post on time. Statistics released by Fair Isaac Corporation indicate that more than fifty percent of the population has never been late with a payment. Know the credit limit of all your cards and to stay below them, in order to maintain your excellent rating.