by AJ Roderick

Created on: October 05, 2009

More than 30 million people have credit issues and scores below the required average. If you're one of those people, here are a few handy tips to help repair your credit score and manage your credit and personal finances. Over time, your rating will increase and you will receive much better interest rates and be able to secure larger loans for bigger purchases.

Step One: Pay Down Your Credit Cards

Revolving accounts such as credit cards have more weight in credit scores than people realize. If there is a large gap between your available credit and the amount you have used, it signifies that you have enough available credit at your disposal at any given time. If your cards are maxed out, this alerts lenders to your financial instability.

Quickest way to elevate credit score - Pay off the cards which are closest to their limits. The wider the gap, the safer you are in a lender's eyes. Keep your balance to below 30% of your credit limit for maximum effect on your rating.

Step Two: Charge Less, Carry a Smaller Balance

This obviously comes as no surprise to most - but charging to your card, maxing out your account and then paying it all off each month actually does not elevate your credit score. Credit bureaus base your credit score from the balance in your last statement - therefore, if your account is completely maxed out, your credit score will be poor, even if you can afford to pay it off when the statement comes in the mail. The bottom line is, the bureaus don't care that the account continually gets paid off, if at the end of each statement tally the account is maxed out again.

Quickest way to elevate credit score - Charge items to your card, but pay well before the statement is due. Remember - if the gap between available credit and used credit is wider, your chance of receiving more credit dramatically improves. Instead of maxing out the card, saving money and paying it off when it comes due, charge to the card and use a smaller amount to pay off some of the debt as soon as possible, then pay off the remaining balance at the end. It may sound silly to carry a balance, but building credit works on different principles.

Step Three: Use Your Older Credit Cards

If you own 3 cards and one of them is paid off and 'retired,' consider using that card to demonstrate that the account is still active and managed. Having more credit options at your disposal, which are attended to and paid off, will help increase your rating as well. Older cards establish a longer

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