How can I increase my credit score?

How can you increase your credit score? Paying off your credit card debt in full each month does not make your credit rating go up. Paying off an old debt, can actually make your score go down. Closing credit cards can also make your score go down. Why? Because by closing your credit cards, you reduce your debt to equity rating.

If you have 3 credit cards each with a 10000 dollar credit limit and I didn’t owe any money on them and I close 2 cards, my equity is reduced from 30000 dollars to 10000. My choice should have been to keep those credit cards open, with no balance, to keep my debt to equity ratio high. Can you see that having credit but with little or no balance owed, is actually a plus.