With a strong credit score, you will receive a steady stream of offers for credit cards, car loans and home mortgages. Some people work hard to have their names removed from any such mailing lists. But these mailings can be useful to you, since they show you what the state of marketplace is for consumer credit deals. Plus, occasionally, you may see an offer that’s really better than anything you have. If you decide to get a new credit card, make sure the terms are genuine—and permanent, not “promotional”—and that the credit card offer is really better than the cards you have. Try to keep no more than four active credit card accounts. If you find a really good offer, replace a card that costs you more. And take your time doing so. In most cases, you shouldn’t close out your oldest card. It has the most history and adds stability to your score. Generally, it’s good to have had your credit card accounts for an average of at least three years. Slowly close out unneeded or unused credit accounts. And, be cautious when canceling—because closing accounts can negatively impact your credit score. Even if creditors offer to raise credit limits, allow yourself only moderate credit limits.

Keep track of every credit purchase you make each month. This will help establish your monthly credit “budget” and spare you eyebrow-raising surprises when your bill comes. Plan your credit spending. Use your credit for planned purchases that you intend to pay off over a specific time period. Impulse buys for “unbeatable” prices can stay on your bill for months, costing you more in the long run. Before taking cash advances, consider the associated fees and finance charges. They can be much higher than the interest on purchases. Avoid approaching or reaching your credit limit if at all possible. You’ll save on finance charges and keep credit available for emergencies like car repairs or unplanned medical costs. And keep an eye out for these warning signs: You’re only able to make the minimum payment on your credit cards for two months in a row. You’ve taken more than one cash advance (outside of travelling) in the last 90 days. You’re surprised by the number of new purchases on any of your credit cards. You’ve done more than one balance transfer in the last six months. You reached or exceeded the limit on any credit card in the last three months. You need to work overtime or a second job to keep up with your consumer debt payments. You’ve made more than one late payment to a credit card or secured loan account in the last 12 months. As we’ve noted, no one of these problems will hurt your credit score dramatically. But several of them happening at the same time can do real damage.

The markets for financing homes and cars are large enough that there's room for just about anyone. But your credit score will determine how much cash you need to put down to buy a home or car...and how much interest you pay for a loan. These numbers effectively push people with poor credit out of the marketplace. And they give real advantages to people with good credit. A person with a FICO score of 750 can pay $500 less a month for a $300,000 mortgage than someone with a score of 570 pays. And those savings are a sort of perpetual advantage that helps the higher scores stay higher. But remember this: While you're making payments on a home or car, most people will consider you the owner. You're not. The lender owns your home or your car until you've paid it off in full. Then you receive the clear title and really own it.

The best strategy is to drive the best car-new or used-that you can afford to buy for cash. Simply said, paying interest to buy a depreciating asset means you're losing money two ways: in the interest and in the lost asset value. You should borrow as little as possible for the shortest period of time you can afford. But most people need to finance their car purchases-the things just cost too much. So, keep in mind that the best approach to financing a car purchase is different than financing real estate: When you're buying a house, the best strategy is usually to borrow as much money as you can afford to buy the most house you can. This means making the smallest down payment that you can. When you're buying a car, the best strategy is usually to borrow as little as you have to in order to get least-expensive car that fits your needs. This, effectively, means making the largest down payment you can.

Some people assume that they have to get financing at the dealership where they purchase their car or truck. This is wrong. Getting the loan through the dealership can be more convenient, particularly if you’re car shopping in the evening or on a weekend, when the banks are closed. But it’s the most expensive way to go.

If you're planning to stay in your home a while, there are many good reasons to consider refinancing. These include: getting a lower interest rate; cashing out some of the equity in your home; and changing the loan term.

Another factor to consider when you’re loan shopping is the length (or term) of the loan. With most conventional mortgages, you’ll be making payments for either 15 or 30 years. If you opt for the longer term loan, you will wind up paying more interest. However, you will have lower monthly payments. If your credit score is weak, your loan broker or bank will probably recommend a longer term with lower payments. If you select a 15-year loan, you’ll pay less in interest and pay higher monthly payments. Plus, you’ll build up equity in the house much faster, since more of your payments will be principal from the start. You also should be able to get a lower interest rate for a shorter-term loan. But your lender will probably want to see at least a good credit score (in the mid-600s) to approve this kind of loan.

If you value your privacy, then you'll find the mortgage application process particularly distasteful. Most mortgage lenders require you to provide full income verification. They'll want copies of your pay stubs, copies of your income tax returns and other documentation before they give you a loan. In exchange for this lack of privacy, you get the best possible interest rate for your loan. Your alternative is to trade in the best rate in favor of some privacy by applying for a low-documentation or no-documentation loan.

Many first-time home buyers are astonished by the variety and size of the fees that show up on their statement at closing time. You definitely will need to set aside more money than you’ll need for the down payment alone. You also will want to compare fees when shopping for a mortgage. These fees can include: an application fee; a commitment fee; a loan origination fee; a loan processing fee; an appraisal fee; a recording fee; and pre-paid expenses. These fees are often lumped together under the term closing costs. And they vary according to your credit score. High closing costs are perhaps the worst side-effect of having poor credit. They can add thousands of dollars to the cost of buying a house. You may be able to include the closing costs in your loan. This reduces your out-of-pocket costs up front, but it increases your monthly mortgage payment.

Historically, American home buyers put down 20 percent of a purchase price and borrowed the other 80 percent. But the booming real estate values of the 1980s and 1990s required more flexible loans. In the 2000s, buyers make a down payments of 10 percent, 5 percent, 3 percent-or even zero. But all of these low down payment loan packages require good credit.