As the economic situation of the nation is forcing families to take a harder look at their finances, many are deciding to pay off and close out some of their credit card accounts, to lessen temptations and to keep their finances and budgets in order. Canceling a credit card involves a lot more effort than simply cutting up the piece of plastic in your wallet. In fact, if you do not take the appropriate steps for cancelling your accounts, you can end up with a serious mess.

These are some basic instructions for anyone to help improve your credit score and to keep you from getting into credit trouble.

Even if your credit score is already pretty good, chances are that it could benefit further from reading thru this list and following at least a couple of these tips to keep your score high.

These tips may seem like common sense, but to those people with a lot of debt, they can be more than a little difficult to follow.

As you probably already know, your credit score is the single biggest factor in determining your ability to borrow money.

However, it’s effects go far deeper than your finances. Here are a few of the big effects:

Your Borrowing Ability

Despite it’s importance to your financial life, studies show that less than 10% of the population get their credit report on an annual basis.

This type of neglect can cost consumers a bundle of money, given the fact that most credit reports contain errors of some kind.

There are many factors that can affect your ability to secure a loan, and one of the biggest is your debt to income ratio.

Those that head out to purchase a new car or even more importantly, to apply for a mortgage on a home will have their options limited by their debt to income ratio.