This is the fifth part of my Credit Series, where I explain the most important aspects of credit, credit reports, and credit scores. Each installment focuses on one factor influencing credit, tools to monitor and improve credit, or an explanation of a specific credit concept.

Account Mix counts for 10% of your credit score and measures the diversity of accounts on your report. There are several types of accounts that can be included on your credit report:

• Revolving accounts include credit cards and home equity lines of credit.

• Installment accounts (accounts that have a fixed payment for a fixed amount of time) include auto loans, mortgage loans, and student loans.

• Open accounts are less common but include cellular service accounts and other home utility accounts.

To score high in account mix, consumers need a record of experience with several different types of accounts. I am young and have only credit cards and student loans, so I am likely to score low in this category.

There are ways to ensure scoring the maximum points available for this category:

• If you have a mortgage, you are much more likely to earn more points in this category. Mortgages are very good for your account (studies show that people who have mortgages are more responsible and stable than those who don’t).

• Having too many credit cards can hurt you in this category. While the optimal number of credit cards is another FICO secret, try to have as many as you need but not more.

• Although paying in cash for a car may be cheaper than financing a car, having a car loan as part of your credit mix can help your score. Still, I don’t advocate paying finance charges just to boost your score. The advantages of improving your credit score slightly (again, the scoring models are secret so it is difficult to predict exact changes) are outweighed by the interest costs of financing, in my opinion.

• People who have finance company accounts on their credit reports can have lower scores. Finance companies can hurt your score because they are considered to be higher risk lenders who targer higher risk companies.

Although account mix is a relatively small portion of your credit score, by avoiding having too many credit cards and understanding which types of accounts will help and hurt you, you should be more aware of which types of credit are beneficial and which are not.

This is the third part of my Credit Series, where I explain the most important aspects of credit, credit reports, and credit scores. Each installment focuses on one factor influencing credit, tools to monitor and improve credit, or an explanation of a specific credit concept.

Debt usage accounts for 30% of your credit score measures your ability to use your credit responsibly and avoid high balances. The main way debt usage is measured is through utilization. This is calculated as the percentage of total credit limits that you are currently using. For example, if I had a credit limit of $10,000 and had balances of $2,000, my credit utilization would be 20%. In general, the lower the utilization the better. Some people think that as long as you keep your utilization below 50%, your score will not suffer, but really a lower utilization indicates responsibility. In general, the lower the utilization score, the higher the credit score.

Some people recommend closing credit credit cards if your are not using them. However, closing an account will cause your utilization rate to increase. Using the previous example, if I closed a credit card with a $5,000 limit, my utilization would just to 40%. Keeping old accounts open will have a positive effect on your utilization. Some people choose to cut up the card to prevent it from being stole, but will leave the account open so the credit limit can help your score.

There are several ways to keep a low utilization rate. Here are a few strategies:

• Increase your credit limits. By asking your credit card company to raise the limits, you will have more available credit and the amount you spend will remain unchanged while the amount you have available will increase. Call up and ask for an increase. This is beneficial if they only do a soft pull on your credit, but a hard pull might have consequences that outweigh the advantages.

• Pay off your balance halfway through the month. By doing this, you are constantly keeping your rate low. Instead of ranging from 0 to $1,000 on your credit each month, you will range from 0 to $500, so at any given point, you will, on average, have half as high of a balance on your account.

• Some people suggest opening a new account to gain extra borrowing power. However, I strongly advise against this because, while your utilization rate will decrease, opening new accounts could have negative impacts on your credit score.

Debt usage is an important part of your credit score, but hopefully you now have a better understanding of what it is and how you can positively affect it.