Consumers beware: Credit killers

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More and more consumers are depending on their good credit to make ends meet as the American credit crisis continues and available jobs and credit become tighter and tighter. Good credit affects more than your ability to gain new lined of credit, it may also impact your ability to rent an apartment or obtain employment. Insurance companies and utilities providers also perform credit checks as a way to evaluate your personal financial character.

FICO credit scores, the number most lenders use to determine eligibility, range from 300 to 850 and a score over 740 is generally considered to be "good." Unfortunately, reaching that number is not quite as simple as paying bills on time and as agreed. While payment history does account for 30 percent of your FICO score, there are several other factors that contribute. With this in mind, the experts at Consumer Credit Counseling Services, a division of Money Management International, would like to point out a few common credit mistakes and ways to avoid their damage.

Not checking your credit report regularly. Request a free copy of your credit report each year from . Familiarize yourself with your credit history and review it for accuracy. Knowing where you stand will help give you the tools needed to increase your score.

Having too many inquires. Generally, six or more inquiries within a six-month period of time will scare a lender. Applying for loans on the Internet and transferring balances on credit cards can also have negative consequences. However, most credit scores are not affected by multiple inquiries from auto and mortgage lenders within a short period of time.

Staying out of debt. Having no credit history is nearly as bad as having poor credit history. From a creditor's perspective, if you have stayed out of debt your whole life, they have no way to judge how you would handle a loan. Maintaining several types of accounts proves that you can handle the responsibility. According to , your credit mix (credit cards, store charge cards, loans, etc.) accounts for 10 percent of your score.

Making late payments. There are several negative consequences to making late payments and the "Universal Default" clause is one of them. Under this clause a creditor, who you have always paid on time, may raise your interest rate if you are late on other credit obligations.

Closing old accounts. It may seem wise to close old, unused accounts, but doing so could shorten the length of your credit history and harm your score. Credit history makes up a whopping 15 percent of your score. If you choose to keep old accounts open, be sure to keep tabs on them regularly to be certain they are not used fraudulently.

Finally, when trying to improve your credit score, be persistent and patient. Scores are continually updated and may move several points each month. Whether your score goes up or down is entirely up to you.