If you think your credit score doesn't matter too much because you're not planning on getting a mortgage anytime soon, think again. Credit scores affect many aspects of our lives -- more than you may think. That's why it's important to keep your score as high as possible.
Paying bills on time and staying well below your credit limits are sure-fire ways to build and maintain good credit. But there are some lesser-known strategies to boost your score as well.
Fix clerical errors: Check your credit reports and correct errors. For example, it can make a big difference to your score if your credit limit for a card is understated. Imagine that you owe $5,000 and your limit is $15,000. That means you owe 33% of your limit. If your limit is incorrectly listed as $8,000, though, it will look like you've borrowed 63% of your limit.
Get credit where it's due: When you fix errors or take actions that should boost your score, make sure that all three main credit-reporting agencies know about it. By law, you can get a free copy of your credit report from each of them once a year -- do so, in order to spot errors and find other score-boosting opportunities.
Ask nicely for a favor: One gambit few people think of is simply asking for what you want. In order to help you pay down your debt more quickly, you might ask your lender to lower your interest rate. If the lender refuses, see if you can find a lower-rate card to transfer that debt to. If you've got one or two glaring late payments on your credit record, you might ask your lender if they could be erased, in a "goodwill deletion." Lenders are likely to be especially responsive to their best customers. And if you're dealing with a collection agency over some debt, see whether they'll delete it from your record if you pay it off. That can be well worth it.
Don't delete your history: If you're planning on closing some of your accounts, think twice. It's often a sensible thing to do, to simplify your financial life, but closing an account can actually ding your credit score. Oddly enough, a host of seemingly sensible moves can hurt it -- such as using just one card for most of your charges.
Prevent bad marks from being added to your report: Here's a valuable tip for anyone selling a home for less than they owe on it: What you're looking at is called a "short sale," and if you end up owing many thousands of dollars to your mortgage lender, you might get it in writing before the sale closes that the debt won't go on your record. Ending up with a big balance owed can be a black mark on your record -- reportedly as costly as a foreclosure.
If a high credit score is important to you -- and for most of us it should be -- always consider how your financial actions will affect your score.
Selena Maranjian is a Motley Fool contributing writer.