https://www.flickr.com/photos/alancleaver/4105755730/in/photolist-69xDbB-7fP58U-bu6uz5-9VxBhR-9VxAFa-dUa8rJ-hSgoZ3-9iGbUx-hDDzqP-3qTLZW-6Ju6DB-9VAsVf-5M4Vao-jcmRXj-egQhnF-NDpJk-9iKjiL-9qSX1P-9iGbHV-ctrb2o-ipkpz8-dLJ6sf-2VMvvp-dAtZwE-ct8iPu-fxYZTf-fy15rf-6frNGS-dP526j-73qZ3Z-fLFKBy-7zfFmG-eja23R-dxj2yH-dttiGb-dLpQ4a-dK233k-fEc3px-cS7x2h-9z3BSt-a5b3bQ-dQmfJG-5KQyH9-e8RJuC-dLvoY5-fxZb3S-dUpFAB-azbQ3C-5SktYX-dtsf7h/Retail therapy may make you feel better – temporarily – but the effect on your credit rating can be long-lasting and can interfere with your ability to get loans.

One of the biggest myths about using credit cards is that simply using them will improve your credit rating. Even when you pay your balance on time, every time, your credit rating is negatively impacted by credit card debt.

Let’s talk about how to build a good credit rating. The most influential factors are amounts owed and length of credit history. To build a good history you don’t have to stop using your credit cards, you have to control spending.

Spending raises your debt utilization ratio, the amount of your debt compared to your credit limit. Lenders don’t like it if you are consistently on the verge of reaching your limit.

Ideally, you want to stay below 30% of your limit, which can be tricky if you have a low limit. If your limit is $500, for example, you would not want to charge more than $150 at a time, even if you consistently pay off your balance. This can be difficult, but if you stay within that range, you’ll build your rating.

Credit history is also important. Older accounts develop your reputation for fiscal responsibility. While switching cards and moving your balance may seem like a good idea, it means you have less history with the account.

Follow these steps to take control of your credit score:

1. Get your credit report and review it. There are many services available; you can get it free once a year. Review it and dispute inaccuracies, then determine which accounts to pay down first based on interest rates.

2. Make a budget and prioritize it. People with higher credit ratings know what they have, what they owe and how they spend. Review bank and credit card statements to see exactly where the money is going. Look for recurring charges you can cancel and find places to cut spending. Prioritize debts and pay them. Then, start saving.

3. Pay down your debt. The longer your history of paying on time, the better your score will be. Consistency now lessens impact of older delinquent payments and debt history.

4. Keep old accounts open and active. You may learn you have old accounts open with a zero balance and be tempted to close them out. That will actually increase your debt utilization ratio. Retain the old accounts and use them. Spread debt between accounts to ensure each stays below the 30% threshold instead of using a single card to the limit.

Don’t open new accounts unless have to. Inquiries reduce your score and getting more credit can lead you down the path to increasing your overall debt load. You’ll be on the road to a great credit rating.