5. How to raise your credit score

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By Money Magazine staff

To borrow as cheaply as possible, it helps to nudge your score from good to fabulous. Hoisting your number from 650 to 770 can save $3,100 a year on a 30-year, $300,000 mortgage.

Here's how your score is sliced and diced - and how to kick it up a notch. Remember: The bigger the slice, the more it affects your score.

  • 35% Your payment history Pay your bills on time. Automating payments online can help.
  • 30% How much you owe Keep balances on credit cards and other revolving accounts below 50% of your credit limit (lower is better).
  • 15% Length of your credit history Rather than let old cards go dormant, charge a latte a month (then pay it off). No activity lowers your score.
  • 10% Your new credit Don't open unnecessary new accounts. And if you're rate shopping for a mortgage or an auto loan, do it within two weeks; multiple requests could ding your score.
  • 10% Your mix of loans You can't do much to change this (except get a credit card if you don't have one).
  • Bonus Request a free copy from each of the three major credit-reporting agencies at annualcreditreport.com. Then tell them about any mistakes you find that are not in your favor. --George Mannes

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