After your payment history, your utilization ratio (the difference between the credit you have available and the amount of credit you're actually using) is the next most important factor behind your credit score. Using less than 30% of your available credit is great; use more than 70% and it could seriously impact your score. To reduce your utilization ratio, you can take two basic steps: Pay down what you owe and increase how much you can borrow. To increase your available credit, simply ask that your credit limits be increased or open a new card or account. Just make sure you don't borrow more just because you're able to borrow more.

Keep in mind, paying a bill in full, and on time, is no guarantee you'll have a lower utilization rate. The key is when your balance is reported to the credit bureaus; if you've made a large purchase but haven't paid the bill, your utilization rate will be artificially high. If you need to apply for credit, make large purchases well ahead of time so you can be sure they are paid off and have "cleared" your credit report.