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One Reason To Bring That Old Credit Card Out From The Drawer

There are lessons to learn from the on-going mortgage guideline changes and it mostly comes down to this:  Good credit is worth working for.

Some of the keys to good credit lie in the basics:

• Pay your bills on time every month
• Don't surpass your credit limits
• Don't co-sign on a loan then ignore it and then expect that it's being paid on time

Some of the keys are not so obvious, though. 

For example, a credit limit should be always be three times its current balance (at least).  This is because with excess capacity on a credit card, a person is left with an emergency source of funds should it ever be needed.  The credit bureaus like to see that.

One of the most overlooked common sense credit tips, tips relates credit "history". 

The credit bureaus reward people that have shown experience in managing credit and the longer that experience, the better the boost to your credit score. 

For this reason, you should not close a credit card account just because you're done using the credit card associated with it.  Doing so erases a part of your credit history. 

The better approach is to bury the credit card in a drawer, take it out every 3-4 months for a a single, small purchase (i.e. $5-10), and then pay your bill promptly.

As regular "client", the creditor will constantly remind the credit bureaus that you are an active card holder, and that you are responsibly managing your debt, thereby increasing your credit score.