Seven Ways to Keep Your Credit Score in the Pink

NEW YORK – If you've been ignoring your credit score, it's time to get your head out of the sand. That three-digit number may seem like an airy abstraction, but it has a very real impact on your life: credit scores are used to determine how much you pay for everything from your car loan to your cell phone and your home loan.

Here are seven ways to boost your score:

1.) Pay punctually. Roughly 35 percent of your credit score is based on whether or not you make regular, on-time payments, according to The Motley Fool's Dayana Yochim. If you're strapped for cash and simply can't cover all your bills, try to limit the amount of accounts in arrears to one. "A history of late payments on several accounts will cause more damage than late payments on a single account," reports Yochim.

2.) Request a "good faith adjustment." If you're normally diligent about making punctual payments, but find you've inadvertently missed your due date on a bill, try asking for a free pass, advises MSN Money's Liz Pulliam Weston. After you've settled your debt, call the lender and ask it to remove the late-payment information from your files. Not every company will do this, but they may be willing to work with you if you've been a good customer.

3.) Ask collection agencies to "disappear" debt. If you've fallen badly behind and the debt collectors are baying at your door, try negotiating. Some collection agencies will agree to remove references to the debt from the credit-bureau files if you pay them off, according to CBS News.

4.) Hold onto older cards. Fully 15 percent of your score is contingent on the length of your credit history, so try to hold on to older accounts. Warning: Keep those old cards active! A dormant card won't necessarily improve your credit score, regardless of how long you've had it.

5.) Keep a good mix. Just like your investment portfolio, your credit score benefits from diversification — 10 percent of your score is based on what types of credit you use, so try to keep a healthy mix of credit cards, retail accounts and other types of loans.

6.) Limit new accounts. If you open a bunch of new accounts in quick succession your credit score may suffer. Why? You begin to look like more of a risk. When your credit limit suddenly shoots up, lenders begin to worry that you'll be tempted to run up big debt.

7.) Watch your spending. The closer you inch toward your limit, the more nervous your lenders will become. To keep your score healthy, try to limit yourself to using no more than 50 percent of your available credit. Hint: If you are in danger of going over the 50 percent mark, CBS News suggests spreading out your debt on cards with high credit limits and low interest rates.