Just a few false moves, and in no time, your credit reputation starts to suffer. It doesn't even need to be something extreme, either. Just a late bill payment here or a retail splurge there is all it takes. Woe to the consumers who make a few missteps in a row and find themselves slogging through suboptimal loans (high rates, high fees) the next time they're shopping for credit.

1. Always, Always, Always Pay Your Bills On Time - Or at least the minimum. Yes, this is pretty obvious advice, but did you know that one-third of your credit score is based on your bill-paying habits? It just goes to show how important on-time payments really are. And if you run into a situation where you forgot to pay and are running a few days late, call your credit card company and explain your situation. We've done this before and have always had success. Just don't make a habit of it!



2. Don't Max Out Your Cards - No matter what your credit limit, going close to or up to the limit can hurt your rating. Your debt-to-credit ratio (e.g., $1,000 of expenses put on a card with a $10,000 credit limit equals a debt-to-credit ratio of 10%) counts for almost one-third of your credit score. The Motley Fool advises keeping the ratio below 10% and below 30% worst case. They say that 50% or more will bring out big red flags from the banks.



3. Keep Your Oldest Credit Cards - The longer you hold a card, the more credit history you have. And since 15% of your credit score is based on "the length of time you've spent in the system", according to The Motley Fool, it's wise to keep the old accounts going. And it can help you with your overall debt-to-credit ratio too.



4. Avoid Applying For and Opening Lots of New Accounts - Think about it: If you borrow money from a friend, and then you go to others asking for money too, it will probably make your friend a bit concerned about your ability to pay him/her back, given all of the other debt you're racking up. Banks feel the same way. So when they see you shopping around for more cards and accounts, they get nervous and may want to limit your spending with them. Ten percent of your credit score is affected by opening new accounts, and your application history sticks around for seven years.



5. Don't Rush It - Having different types of accounts and loans can help your credit rating, but don't rush out and try get a wide-variety of loans to help your score. Take it slow. Whenever you get a new loan, your credit score takes a temporary hit. So getting multiple credit cards, a car loan, a mortgage, and other loans shouldn't be done in a short time period.