- Traci, Alaska

Whether or not adding your name to your husband’s accounts will improve your credit score depends on a couple of factors. “If the account is new, or young then your score could go down,” says Credit.com’s John Ulzheimer. He adds that if the accounts become overly utilized, it could ding your score as well. However, if your husband’s accounts are well established and you don’t foresee over-utilization being an issue, by all means, add yourself as an authorized user. Here’s why doing so can give your credit score a boost:

It can lower your utilization ratio. When you sign on to your husband’s accounts, it will affect something know as your aggregate revolving utilization ratio, which in turn affects your credit score. Revolving utilization is the amount of your revolving credit limits that you’re currently using. Revolving accounts are those where your monthly payment is based upon your balance. Your revolving utilization is equal to your total balances divided by your total credit limits. “If by being added she lowers her aggregate revolving utilization then her score will likely go up,” says Ulzheimer. To improve your credit score, you’ll want to aim for revolving utilization ratio that’s at a level of 10 percent or less.

It can give you a longer credit history. “If by adding the account she significantly increases the age of her credit report, then her score will likely go up,” adds Ulzheimer. If you have a credit history that’s on the short side, adding yourself to your husband’s more established accounts can boost your score due to the fact that 15% of your credit score is based on the length of your credit history.

Zero liability. While having zero liability for the charges to your husband’s account won’t directly improve your credit score, it can prevent you from having credit issues further down the road. “One huge upside is because there is no liability for the payment she can always “jump off” the account and save her credit,” says Ulzheimer.

-Lori, New Jersey

It seems logical right? Don’t use your card, you won’t have a balance and you won’t have to worry about paying it off. Unfortunately however, that’s not the case. “Card issuers have been closing out millions of inactive accounts…they are doing this in order to limit their risk as they are facing mounting losses related to card members who are unable to make payments on their credit cards,” says CardRatings.com’s Curtis Arnold.

If you don’t use your credit card over about a six-month period, it may be considered inactive and your issuer may cancel your account. Unfortunately, this will impact your credit score. “Closing out an account that you haven’t used in a while on the surface may seem like a prudent thing to do, but doing so will likely adversely affect your credit score,” says Arnold.

The decreasing of your score has to do with a little something called your utilization ratio. Your utilization ratio compares the amount of credit you’re using to the total credit you have at your disposal. If you have a small amount of debt and a lot of available credit, you have a low utilization ratio—and that’s a good thing when it comes to your credit score. When your issuer closes your account due to inactivity, it decreases your available credit, therefore dinging your credit score.

How can you avoid this problem in the future? To keep the rest of your cards active, be sure to use each card once a month or so—even if it is for something you’d typically pay cash for, like a movie ticket or a coffee. “Keeping a monthly automatic charge on your card is also an easy way to keep your account active,” suggests Arnold.

-Brad, South Dakota

ANSWER: Thanks to new credit card reform laws, it’s becoming easier to opt out when you’re hit with a higher interest rate. However, the date in which the notice reflecting your change in terms was mailed will affect whether or not you’re able to opt out of the new interest rate you’re asking about.

If your notice was mailed before August 20th, 2009, then you may be out of luck. This is due to the fact that the portion of the Credit CARD Act of 2009 that outlined the rules for disclosure of contractual changes went into effect on that day. As the law stands now, your credit card company must give you at least 45 days notice in advance of any interest rate hikes. This wasn’t always so. Before the reform took effect on the 20th, the time frame was just 15 days. With the new law, if you don’t like the change, you can close the account and pay off the balance at your original interest rate. Before, the 20th, opting out of a higher interest rate wasn’t a consumer right and credit card issuers offered opt-out options at their own discretion.

How can you avoid an inability to opt out of higher interest rates in the future? One of the most important things to do is to follow the instructions for opting out very carefully. “Simply closing the account and not using it will not be sufficient.” says Credit.com’s Gerri Detweiler. What should you do? “You typically have to respond in writing as instructed in your notice. I recommend sending your opt out notice with delivery confirmation and keeping a copy for your records,” advises Detweiler.

-Lisa, Alabama

Every year the NFCC assists over 3.2 million people who are struggling with their finances. For over 50 years, NFCC member agencies have offered free or low cost services (whether or not you’ll be charged for the help they provide depends on the member agency and the laws in your state) to those wanting to take control of their debt. The NFCC offers confidential help via phone (through their national toll-free hotline), online or in person.

Through credit counseling, the NFCC can help you to work towards paying more than the minimum amount on your bills. During a session, your counselor will address your credit issues and help you find ways to work towards solutions. “Adjusting the budget, decreasing spending and increasing income would be ways to find extra money to pay more than the minimum and get out of deep incredibly sooner,” says the NFCC’s Vice President of Communications Gail Cunningham.

If you’d like the NFCC to negotiate with creditors on your behalf, they can do that through a Debt Management Plan, or it’s commonly known, a DMP. A DMP is essentially a plan to help you tackle your debts. “After a thorough intake of all income, living expenses and debt obligations, if a Debt Management Plan is appropriate for the consumer, the counselor would contact each creditor and propose a new monthly payment,” says Cunningham.

A DMP will set up a payment schedule for you to repay what you owe. You’ll deposit funds with your credit counselor on a monthly basis. The counselor will then send those funds to your creditors. According to the NFCC, when you’re enrolled in a DMP it’s common for creditors to lower your interest rate and halt all late and over limit fees once the new payment has been accepted. “The goal is to allow the consumer to make all of his or her living expenses in full while still addressing debt reduction,” says Cunningham.

While the NFCC can help you figure out ways to pay more than the minimum and help you to craft a Debt Management Plan, helping you with your equity line debt isn’t something they can do directly. Typically, NFCC Member Agency counselors don’t deal with secured debt. The reasoning is they can’t lower the monthly payment on this type of debt. While they can’t deal with it directly, through a counseling session you’ll be able to discuss how you can cut expenses and work towards reducing your debts. “Even though the payment to that specific debt might not be lowered, the budget and other debts might be adjusted enough to allow the equity line of credit to be satisfied,” says Cunningham.

“Is there an amount to overpay on a credit card that helps your credit score? For example is paying double the minimum due best or does any amount help?”

Answer: In short, no, overpaying on a credit card will not directly affect your credit score. “Paying the minimum or more than the minimum doesn’t have a direct impact on your scores because that level of detail is not reported to the credit bureaus,” says Credit.com’s John Ulzheimer.

What’s the best way to improve your credit score? Paying down your debt. “You can improve your scores by paying your debt down, which generally requires more than a minimum payment,” says Ulzheimer.

Aside from paying down your debt, there are other things you can do to pump up your score. Here are a few steps you can take to give it a boost:

Cut, don’t cancel. If you have a card that you rarely use, don’t cancel it. The longer your relationship with your lender the more beneficial it is to your score. If having the card in your possession is too much of a temptation, cut it up, don’t cancel it.

Be punctual. 35% of your credit score is based on our payment history and even one late payment can ding your credit score. One of the best ways to stay on top of your payments is by setting up automatic bill payment.

Have a variety of debts. If you have a mixture of credit cards and other types of loans (car loans, student loans, etc.) it proves to lenders that you can manage a variety of debts.

Keep your balances low. It’s a good idea to make sure that you’re not running up balances on your cards. Aim to use less than 10% of the total credit you have.

Know where your credit score stands. Once per year, each of the major credit scoring bureaus (TransUnion, Equifax and Experian) will provide you with a copy of your report. Visit AnnualCreditReport.com to get yours.

-Christine, New York

When teens and credit cards mix, the outcome can sometimes be disastrous. But, if handled correctly, credit cards can be a great tool for teaching your college-age kid the basics of financial management.

After your daughter turns 18 in January, she may want to hussle to get that first card. Otherwise, she will need a cosigner. When another piece of the new credit card legislation takes effect on February 22nd, any person under the age of 21 will be required to have a parent to co-sign on their credit card. “Mom needs to be sure she is comfortable with co-signing, which could affect her credit score if her daughter misses a payment,” says Karen Blumenthal, author of “The Wall Street Journal Guide to Starting Your Financial Life.” If your daughter can prove that she’s making enough money to handle having her own credit card, she may be able to side-step the need for a cosigner.

When you start shopping around for a credit card, let your daughter do the work. “It’s good practice for the student to research the options–the interest rate on charges, the interest rate on any cash advances, and the fees you’ll pay if you pay late or go over your credit limit. That way, the card holder knows exactly what the terms will be,” says Blumenthal.

As you probably know, the options for credit cards can be overwhelming. To make it easy on your daughter keep things simple. “I recommend a young person apply for a plain vanilla student card with no annual fee and the lowest interest rate you can find,” suggests Blumenthal. Check and see what your teen’s bank or credit union are offering in terms of credit cards, as many offer student-friendly options.

Before the card gets in your daughter’s hands, lay out some ground rules. Make sure she uses the card at least occasionally and that she pays the full amount due every month. “The single most important thing she can do to build a good credit record is to pay her bill on or before the due date every month. Set up online bill paying to make this easier,” advises Blumenthal

-Kelly, Oldsmar Florida

You’re right-using consumer credit counseling to manage your debts can potentially affect your credit score. What may surprise you, however, is the fact that when your score is calculated using the FICO scoring model, whether or not you’ve received counseling won’t affect your score. “Any notation on a consumer credit report indicating that the consumer is or has been involved in credit counseling is ignored by the FICO scoring model,” says CardRatings.com’s Curtis Arnold.

However, what you do with the advice you get from your consumer credit counselor is another matter. For example, if a counselor advises you to manage your debt or credit cards a certain way, and you follow through with that advice, it could potentially have a negative impact on your score.

One thing is for certain though; getting credit counseling will have much less of a negative impact on your credit than bankruptcy will. “The negative impact of credit counseling is fairly minimal, whereas a bankruptcy has HUGE negative implications. For example, according to Credit Counseling of Arkansas, your score can drop as much as 100 points if you file bankruptcy,” adds Arnold.

If you decide to move forward with credit counseling, a good way to start looking for help is through the National Foundation for Credit Counseling. The NFCC is a national, nonprofit network of counselors whose mission is to help you get out of debt. Through the NFCC, counseling is available by phone, online or by mail. The cost of counseling varies depending on the level of support you need and also on your state’s laws. Most of the time though, you can get counseling at no or low cost. To find a counselor near you visit the NFCC’s website by clicking here.

-Pat Bosha, Schnecksville, IL

You’re right-if you cancel your card; your credit score will take a hit. If you don’t, your creditor will force you to pay the annual fee for being a cardholder… and that’s something creditors are doing more frequently to mitigate the effects of the Credit Card Reform Act, whose first wave of reform took effect today. According to Synovate, a company that tracks direct mail, credit card issuers are sending fewer credit card offers to households, yet a higher number of those offers now have fees attached to them.

So which is worse, paying the annual fee or having a credit score that’s a bit lower? According to Credit.com’s John Ulzheimer, over the years, it may actually cost you more money if you keep paying the annual fee, versus cancelling the card and potentially paying a higher rate on an auto loan or a mortgage.

If you’re absolutely sure you want to cancel the card and avoid the annual fee, Ulzheimer suggests that before you close the account, replace your soon-to-be lost line of credit with another card (that doesn’t have an annual fee). Doing so will protect your credit utilization ratio-a number used in calculating your credit score. The utilization ratio compares the amount of credit being used to the amount of total credit that’s available to you. A low utilization ratio is great for your credit score-it means that you have a lot of available credit but not much debt. By replacing the line of credit attached to the card you’d like to cancel with another line of credit from a card with a card with no annual fee, you’ll be in the same position utilization-wise as you were before, with no annual fee and a credit score that’s still in-tact.