In an ongoing basis, 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 about once a year, and dispute any inaccuracies. www.annualcreditreport.com is the federal governments site for consumers to do this. You can get one free credit report for each of the 3 bureaus once per year for free. They do make you pay to see your score for a nominal fee, which I would recommend paying.
The two main components of your credit score are your payment history and the amounts you owe. About 35% and 30% of your total score makeup respectively. Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment. Don't close any accounts six months before applying for credit. It hurts the capacity part of your score, or relation between the amount you owe and how much you could borrow. Again, please meet with me if you have credit questions. Even if you are 6 months out from home shopping or refinancing.
Conversely, don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better. (Under 40% of your credit limit). If your balances are larger than you would like, and you can't afford to pay them down right away, it is appropriate to ask for a credit limit increase to get that ratio to 40%--hence improving your score.
The rest of your score is made up of analytical measurements of how longer you have had credit accounts, the type of accounts, (mortgage, installment, or revolviing), and the number of inquiries or credit pulls you have had within the last year.
So if you are thinking about closing some accounts (after you get your mortgage!), call the companies, say you are thinking about closing the account. Ask them if you didn't what is the best interest rate they would offer and shop them against each other. Keep the card companies that offer you the best interest rate with an eye toward keeping cards that you have had the longest relationship with (length of account history).
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 people request their own credit reports to keep up with what's on them, and 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.
Bankruptcy filings, foreclosures, and judgements which can stay on your credit report for as long as 10 years, can significantly lower your score but don't necessarily preclude you from getting a loan.
Ideally, a optimized credit report contains 0-2 mortgages, 0-2 installment loans (student loans or car payments with a fixed payment and term), and 1-3 revolving accounts (credit cards with a variable balance and payment). Remember you have to use credit to get a credit score. Use it to your advantage!
I've seen, that by carefully managing damaged credit, it's possible to add as much as 150 points per year to your score. For existing good credit score, yearly monitoring and getting to a lender before you shop for a mortgage or auto, can give you leverage before diving in to shop for those emotional (and life changing) purchases. I'm happy to point you in the right direction.
