Protecting Credit Scores In Downturn

You're all-important credit score can affect everything from your ability to borrow to your ability to get a new job.

Consumer Reports Money Adviser has some important information on how to protect your credit score in this volatile economy.

Home foreclosures are is credit-card bills are mounting.

You may hope to improve your credit score by cutting up all those credit cards, but Consumer Reports says that's a bad idea.

"Canceling your credit card can actually hurt your credit score because you give up the available credit on that card. And available, unused credit is one of the key components of your credit score," said CR Money Adviser Greg Daugherty.

One of the most effective ways to improve your credit score is to pay down balances on your credit cards.

"Don't stop using your cards completely. Using a card and keeping up with your payments can be good for your score," said Daugherty.

Second, be careful applying for loans. Too many loan applications in too short a time can hurt your score, especially if they are rejected.

"Apply for credit in person and ask the loan officer if you qualify before submitting a loan application." said Daugherty. "If you're going to be rejected, go elsewhere."

Third, if you're drowning in unpaid bills, seeking debt relief is good. But think twice about entering into a partial payment agreement.

"New creditors don't like to see old creditors getting only a partial payment," said Daugherty.

Partial payment, though, is better than nothing.

Don't miss payments on ANY bills, even those you may consider "less important."

Any bill of 100 dollars or more that goes to a collection agency shoots a hole in your credit rating.

Credit scores can range from 300-850 points.

The higher the number, the better.

Consumer Reports says you can get your credit score by going to

For about $16, you'll be able to check your score with two of the three major credit bureaus.

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