To build a credit score, an individual needs to keep his debt-to-credit ratio low, pay off small balances, keep good credit on his credit report, pay credit card bills on time and pay and charge the same on a credit card. Using credit responsibly also helps a score.Continue Reading
An individual should strive to keep his debt-to-credit ratio at 30 percent. This ratio is the amount of credit that a person has versus the amount he is actually using. Balances should be paid down and kept down as much as possible at the end of the month.
Having several small balances scattered across several cards can do more harm than good in the long run. The reason for this is that an individual's credit score includes how many of his cards actually have balances on them, no matter how big or small those balances might be. It's better to use a single card for all necessary purchases.
Instead of getting paid off accounts eliminated from a report, it's better for a person to leave them on as a way to improve a credit score and show a history of responsible use.