Tips for a Healthy Credit Score
The other items will lower your score only a few points and your score will eventually recover.
Some credit card companies have come under fire lately for monitoring cardholders' spending habits and then raising or lowering their interest rates, and credit limits accordingly. Some companies have been caught changing terms of use and credit limits for spenders who use their cards to buy what the card deems risky purchases, frivolous purchases, or irresponsible purchases. Of course that determination is up to the person making the purchase and while a card company is within it's rights to extend or revoke credit, doing so to a responsible cardholder doesn't make much sense. Either way, this action of lowered credit limits can make your available credit lower, thus making your used credit percentage higher which in turn lowers your score.
While you generally don't need to consider every purchase as a potential credit score ding, you should plan ahead when considering a new line of credit, a car loan, or a mortgage. These applications for new credit will lower your score a few points for a while, and defaulting on any of these loans can cause your score to drop 50 points or more. This blow to your credit score can also come from skipping on cell phone payments, rent payments, student loans, and more.
The best way to increase your credit score is to apply for some credit, use it in a responsible way, and never spend more then you make. If you use credit cards to build credit be sure to read your card-member agreement each month to look out for sudden changes, know your credit limit and use less then 30% of it at a given time, pay your bill in full, and don't open too many accounts at once.
Changes to your score generally occur at the end of the month when credit companies report to the 3 credit agencies and most small decreases will disappear in as little as 3 months bringing the score back up again. Responsible use and responsible borrowing will help build and maintain your credit as there is no quick fix to increasing a low score.
