There are a lot of spammy, scammy, and downright fraudulent credit history and credit score websites so you should be, by nature, suspicious of every website that offers to give you a free credit report or score. The only credit history website that you should ever remember is AnnualCreditReport because it’s the only one sanctioned (and legally ordered) by the federal government. Once every 12 months, you can get a free credit history report from each of the three credit bureaus: TransUnion, Equifax, and Experian. A great strategy is to stagger the requests so you essentially get your report once every four months.

What you won’t get with that free credit report is your credit score, which is what lenders care about anyway. If you have to get a free credit score, either for your housing application or something else, you’ll have to use a service like FreeCreditReport.com. Now, didn’t I just talk about how there are a lot of spammy, scammy, and fraudulent credit score websites? Well, this one isn’t one of them because it’s run by one of the credit bureaus - Experian.

When you get your free credit score, they sign you up for their Triple Advantage Credit Monitoring program trial of 30 days. Cancel within the first thirty days or they will start billing you $12 a month.

Problem solved!

If you have a Capital One credit card, then you’d probably be surprised to learn that your credit score was being penalized for it. That’s because Capital One didn’t report your total credit limit to the three credit bureaus, they only reported your credit balances. What this meant was that your percent utilization (30% of your score) was higher than what it really was and your total credit limit was lower than what it really was, resulting in a lower credit score. Before you say, heck, that doesn’t really matter does it? You should know that this one change can boost your score anywhere from forty to eight points, a significant point difference.

Increasing your credit score from 659 to 700 can cut your mortgage rate from 7.68% all the way down to 6.59% on a thirty year $300,000 mortgage. That difference will save you $221 a month and over $2600 in the first year.

So if you have a Capital One card, rejoice! If you don’t, you probably don’t care then.

Bumpage is the practice of doing soft credit inquiries so often that the hard inquiries start falling off your credit report. When the hard inquiries start falling off the report, your score will increase because the number of inquiries that matter, the hard ones, will have decreased.

How this can be accomplished is by subscribing to daily credit history reports that will ping the credit unions for your report every single day. Eventually the soft inquiries push off the hard ones. This apparently only works with TransUnion and Equifax reports.

According to some experts, each hard inquiry will decrease your credit score by around 7 points for approximately six month. After six months they cost you less, after a year they apparently cost you nothing. A hard inquiry will naturally go away after two years.

This isn’t a myth created by the credit card industry to get you to keep your unused credit cards, canceling a credit card could potentially lower your credit score. Your credit score is calculated based on five factors and when you cancel a credit card, you will lower your score in several of these categories.

• Payment history
• Amount owed
• Length of credit history
• New credit
• Types of credit used

The major piece of the “Amount owed” category is something called credit utilization, that’s a calculation of how much of your available credit you’re currently using. When you cancel a credit card, your credit utilization will increase since your amount of available credit will decrease by the credit limit of that card.

As for “Length of credit history,” that’s simply an average of the ages of your credit cards. If you cancel your oldest card, your average will be lower and thus your risk will increase (you’ve had a shorter history of credit). This, of course, means that if your credit card is fairly new, canceling won’t negatively impact your score as much.

Now, there are non-credit score related benefits to canceling a credit card that could outweigh the immediate disadvantages of canceling that credit card. If you are no longer using that card and never will ever use it again, keeping it around serves no purpose and you run the risk of losing it or having someone steal it. If keeping it around at a $0 will only tempt you into spending with it because you’re not using it, that’s another reason to cancel the card. You have to weigh the benefits with the drawbacks and then make your decision, but from a credit score perspective, it is better to keep a card around.

Read more at Bankrate.

You might have seen that term, 0% balance transfer arbitrage, floating around the internets, one personal finance blogs, on quick money blogs, on any number of sites that deal with money and getting more of it. 0% balance transfer arbitrage is where you take advantage of an offer to earn a little more money for yourself on the side.

In the beginning, credit cards offered promotional 0% offers to folks who were willing to roll over their existing credit card debt to their card. The reason for this was that after the promotional period, the card holder would likely stick with the new card and thus make their interest payments to them. This is a win-win for both sides - cardholder gets 12 months of 0% financing, credit card company gets to earn interested after the promotional period.

Enter in the savvy credit card user. Now, with the ease with which you can get a balance transfer, many folks are getting a 0% balance transfer check and depositing it with a high yield savings bank like ING Direct. What this means is that you’re borrowing money at 0% and earning 4.6% (some accounts have as much as 5.05%) on it, a $10,000 balance transfer would net you $460 for absolutely no work whatsoever. $460 is nothing to sneeze at.

Are there pitfalls? Certainly, the effect on your credit score will be negative - but if you don’t plan on getting any big loans in the near future, this could be an easy way to boost your cash flow with little risk. Another pitfall is not watching the terms closely, there are cards that will give you a 0% balance transfer but charge you a fee, which can kill the deal. It’s important to double check that you’re getting a no fee balance transfer when you execute it.

There are three major credit bureaus in the United States and each one of them tries to keep an accurate picture of you in terms of credit worthiness. The three bureaus are Transunion, Experian, and Equifax and you might be wondering what goes into this magical and mystical “credit score” and what you can do to improve that score so that you can get favorable loan terms the next time you need an auto loan or mortgage.

Before we go into the vague mathematics, let’s first discuss the underpinnings of credit scores so that the math makes sense. Imagine you have to lend someone money and you know nothing about this person, what sort of information would you like to know about them? You probably want to know how much they currently have borrowed (outstanding debt) right? The more they have borrowed, the less likely you’ll want to lend to them. You probably want to know how often they’ve paid on time, how often they’ve been late, or perhaps if they’ve ever defaulted (payment history). As you think about this more, if you could buy a history report on a person, you probably want to know how far this history goes back (credit history length) so you can see a trend or pattern. Finally, if you’re really good at this sort of thing, you probably want to know how many times this person has asked for credit recently (number of inquiries) because they could be trying to get a lot of credit quickly, you don’t want to keep giving this person money if they’re in a tight spot.

So, now that you’ve gone through that, here’s what goes into your credit score:

• 35% is based on your payment history - This covers how many times you’ve been late, whether it’s gone to collections, etc. Time is a factor here, having paid late ten years ago is less damning than missing that payment last month.
• 30% is based on your outstanding debt as a percentage of total credit - If you’ve tapped 90% of your credit and are looking for more, you’re far riskier than someone who has tapped 10% of their available credit and wants a new card. The higher the credit utilization, the lower your score.
• 15% is based on your credit history length - This is why people advise you to get a credit card early (even if it means sticking it in a drawer), the longer your history the better because they have more information to work with. A history of a year is clearly not as valuable as a history of ten years.
• 10% is based on your number of inquiries within the last year - In a tough financial spot? You’re probably going to be requesting for credit. If you have too many pings in the last year, your score is going to be lower than if you didn’t have any. This makes sense, if I told you that the person you wanted to loan money to just opened five credit cards in the last month, you’d likely be wary. Lenders think the same way.
• 10% is based on the types of credit you have - The number and type that you have will be a factor and this is only significant if there isn’t much information from the other categories. From a personal perspective, if you know someone has $15,000 in debt, it makes a big difference if it’s credit card debt or if it’s a car loan, right?

So, those are the five major factors that come into play when it comes to calculating your credit score, hopefully I’ve cleared some of it up for you and the number seems a little less magically generated.