Updated Good Credit Score Consumer Guide
It always helps to keep up with changing times when it comes to understanding your credit score. Generally speaking the range of scores is very similar to what they have always been.
However, there are some factors that affect whether you are going to get financing again in the future. New rules now apply to creditworthy people who are currently now working to maintain their good name.
New Rules
What you see below is based on certain legal guidelines passed within this past year (2010). These are new tips that are being presented to everyone lately:
Open more credit cards. This may seem contradictory to other information you may have read saying to keep as few open as possible. However, too few can be a problem as well.
After all credit utilization makes up about 30% of your credit score versus application for new credit which makes up 10% of your score. Therefore, if you have two cards that you have had for awhile it may be time to open up a third, and then six months later open up a fourth.
Max out some of your credit cards. The keyword here is SOME! This technique for keeping a good credit score will not work if you do this for any type of card you own. However, certain types of cards such as the American Express AXP card along with other “good credit rating” cards do not report credit limits to agencies.
Use this technique carefully though. Make sure you understand the terms and conditions as presented to you when you first opened your card. This is not a decision to be made lightly.
(Almost) never ask for a lower APR-This may have worked in the past. However, you have to be very careful about using this technique. These days it is not recommended unless you are absolutely certain it will not hurt your credit.
The reason why it could hurt you is because if you become subject to an account review it can cause problems. Maybe the creditor does not like what it sees and then hikes your interest rate or reduces your credit limit. This can have a detrimental affect on your credit score.
Typically the only way you are recommended to ask for a lower APR is if you have a backup card to which you can transfer a balance. Even then, this is a very risky move.