How can you improve your credit score?

If you want the best rates available, one of the most significant factors is your credit score.  Stay on top of your credit, do what you can to use credit responsibly and it will help you save money!  There are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report at least once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.  In fact, any inquiry that is not for the purpose of extending credit at your request, should not count against your credit score (insurance, employment, etc.)

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time.

Don't "max out" your credit lines. Keeping your balance at 50% (or lower) of your available limit is ideal.  This will help your scores to improve.  Borrowing more than 50% of your available limit will actually bring your scores down (the higher the balance-to-limit ratio, the lower the score). 

The average consumer who manages their debt well, should not need more than 3-5 credit accounts (in addition to your mortgage).  Having too many open accounts can also adversely affect your score.