So, you’ve got some loans and think you are pretty hot stuff. Well, if you try to max out those loans, you will find that the hot stuff just cooled dramatically and you now have a low score to prove it. The reason is that if you don’t control the loan balances, then you will cost yourself some serious points because you have to keep the loan balances in control. For revolving accounts don’t go over 45.91%. Keep it safe and stay below 45%. You have probably heard many “credit experts,” tell us to keep our balances below 50% and it sounds really good. But the credit bureaus have heard the experts also and to outsmart them, they dropped their ratio limit to 45.91% just to outguess them. Sneaky, but it is effective. Want to be on the insider scoop, then drop your credit balances that extra 5% and make some extra points on your credit score.

On installment accounts, getting your balances 20% below the original balance as quickly as possible will help to boost your credit scores as well. I know some people who get a car loan, house loan or personal loan and quickly pay off that first 20% to get the loan balance below 80% and see their credit scores jump up again. I can’t say how many points because it is always conditional on about 100 different pieces of information in your credit file that I have no way of knowing. But it will jump up, I assure you.

Open accounts are accounts that you have opened by going to a creditor to get a loan for a product or service. These can have a balance or you can pay them off each month. It can be a revolving account (an account that has no payoff date and the payment varies depending upon the balance owed) or an installment account (an account with a set payment and a set payoff date). Open accounts are necessary for a good credit score but too many open accounts can be bad for your credit score also. There is a balance that needs to be in place.