Your credit score is a short-hand way to tell potential lenders what sort of credit risk you are. So, any negative financial activity will lower your score, such as bankruptcies, judgments, tax liens, loan defaults, repossessions, foreclosures and late payments.
John Ulzheimer at smartcredit.com says don't max out your cards or even get close. Credit card debt that exceeds between 10 to 30 percent of your credit limit will also drag down your score.
Ulzheimer says the best way to boost your credit score quickly and significantly is to pay down that credit card debt.
"And it doesn't take more than 30 days for your credit reports to be updated showing the new lower balance. And if you can knock off 50 percent, 25 percent, even 10 percent of your credit card debt, you can really change your credit score to the good side very quickly and quite significantly," he says.
Credit Score Confusion: What you don't know could hurt you
How Credit Scores Affect the Price of Credit and Insurance