Nice summary, pretty good read:
Full article: http://www.frugaltravelguy.com/2014/03/five-factors-that-affect-your-credit-score.html
If you are thinking about applying for one or more travel rewards credit cards, the best starting place is knowing what factors affect your credit score and how you can control them and your score. The five factors are:
1. Payment history. How have you made your payments in the past on mortgages, credit cards, installment loans and retail store charge cards? Card issuers firmly believe that how you have handled your credit in the past is a clear indication of your future behavior.
2. Your outstanding debt or utilization ratio. How much do you currently owe in relation to your available credit? If you currently have an $8,000 balance on a credit card with a credit limit of $10,000, you are at an 80% utilization ratio. Lenders like to see utilization ratios of under 50% on individual obligations and your overall obligations.
3. Your credit account history. The longer you have had a successful credit history the better. That’s why we always suggest keeping your oldest credit card accounts open but with a zero balance. It helps lengthen the average age of your credit file.
4. Recent inquiries. This is the one factor you can control by spacing out your applications. If you are a recent requestor of credit it may indicate to card issuers that you are a heavy user of credit or current credit seeker. This is particularly important if you have a relatively short credit history. That’s why we suggest only applying in batches of applications if you are comfortable and only as frequently as every 91 days.
5. Types of credit. A strong credit file will show success at handling all type of credit including retail charge cards, credit cards, installment loans and mortgages. For those new to credit, this diversification takes time. Start with a retail charge card, and several months later try for a small installment loan from your local bank or credit union. If necessary, secure the loan with a certificate of deposit or car. Your third action can then be a travel rewards credit card. This is not a set-in-stone order, but has shown to establish credit scores and files that warrant credit card approvals.
Remember that we are looking for credit scores of at least 700 before applying for travel rewards cards. Start slow with one or two cards after establishing your credit score and file. Your credit file will stay with you for the rest of your life, so don’t start out by taking on more than you can handle.
Your credit is one of your most important assets.
That's a good read.
