Reduce your debt-to-credit limit ratio. This will help improve your credit score. Your monthly debt payments, including your mortgage, should not exceed 35 percent of your gross income.
As the very first step, avoid credit card debt. The best rule of thumb is simply, "if you can't pay for something with cash, you can't afford it." If you have a credit card balance, pay as much as you can above the minimum each month. If you receive gift money, a bonus, a second job or a tax refund, use this to pay off your debt. You can even make micropayments multiple times during the month to pay off your balance faster. Eat a meal at home and immediately apply the money you saved to your credit card balance.
