"Unfortunately, most consumers still do not know basic facts about credit scores and their financial significance," according to the Consumer Federation of America Executive Director Stephen Brobeck.

In fact, according to a recent poll conducted by Opinion Research Corp., only 27 percent of consumers understand that scores measure credit risk.

The truth is, your credit score, sometimes called a FICO score, is a number based on the information in your credit file that shows how likely you are to pay a loan back on time -- the higher your score, the less risky you are.

1. Pay your bills on time.

2. Keep balances low on credit cards.

3. Don't open a number of new credit cards that you don't need.

4. Have credit cards - but manage them responsibly.

5. Closing an account doesn't make it go away.

I have a question on # 2, 3, 5

#2 - How low is considered low? from what I hear if you have a Zero balance on your Credit cards, that can look bad toward a creditor or for us looking to buy a house. If there a general amount or percentage we should have on there as general rule of thumb?

#3 - Need. What is Need, and how much is too much. Or a better question is how many SHOULD we have open to get the best credit?

Because I used to have 3-4, but I did the free balance transfer to the best one with 0% interest. I can close off the others, but I heard closing them off looks bad on your credit.

#5 - Like I just said I heard closing them off looks bad on your credit (from what I hear). What is a way I can close off the account to where its IMPOSSIBLE for anyone (including myself) to put anything on it, or for it to have any possible chance to be used in a "criminal way"?

Would like to add one point, that is " to clear off the particular credit card thats maxed out first"

Creditors like to see that your accounts are less than 35% utilized. If you have a lot of maxed accounts, that will hurt your score.


You are correct that closing old established accounts will hurt your credit more than help it. Creditors like to see that you have old established accounts with good histories. I would recommend that you keep 3 accounts in good standing at all times. If you open too many accounts, that can also be seen as a bad sign because you have the ability to put yourself into a lot of debt too easily.


If you want to keep yourself from using your accounts, your best bet is to just cut up the card and throw it away, but DO NOT close the account if it's an older well established account. There is no reason to close your account unless you are paying an annual fee to keep it open, then you just have to weigh the anual cost with the benefits of keeping your credit score higher. You could keep those cards with annual fees for several years while you're building up other good cards that have no annual fees, then cancel the one with the annual fee at a later time. It's also possible to negotiate with certain credit card companies to remove those fees completely.