Protect Credit Score In Downturn

WASHINGTON, DC (WUSA) -- Home foreclosures are up, so is unemployment, and your credit card bills are mounting. 

If you're thinking of cutting up all those credit cards to improve your score, well, that's a bad idea.

"Canceling your credit card can actually hurt your credit score because you give up the available credit on that card.  And, available, unused credit is one of the key components of your credit score," says Consumer Reports' Greg Daughtery.

One of the most effective ways to improve your credit score is to pay down balances on your cards.

Greg says, "Don't stop using your cards completely.  Using a card and keeping up with your payments can be good for your score."

Also, be careful applying for loans.  To many loan applications in too short a time can hurt your score, especially if they are rejected.

"Apply for credit in person and ask the loan officer if you qualify before submitting a loan application.  If you're going to be rejected, go elsewhere," says Greg.

And, if you are drowning in unpaid bills, seeking debt relief is good.  But think twice about entering into a partial payment agreement.

"New creditors don't like to see old creditors getting only a partial payment," he says.

Partial payment, though is better than nothing at all.  Don't miss bill payments, even those you may consider less important.

Any bill of $100 or more that goes to a collection agency shoots a hole in your credit rating.

Credit scores can range from 300 to 850 points.  The higher the better.

You can get your credit score by going to myfico.com.

For about $16, you'll be able to check your credit score with two of the three major credit bureaus.