Paying debt and hiking credit score

A reader of CBS Marketwatch writes in asking how best to pay off credit cards in order to improve their credit score.

The answer, "My credit-score guru, Ginny Ferguson of Heritage Valley Mortgage in Pleasanton, Calif., says that as long as you have the cash, "by all means" you should pay down the cards on which you are carrying balances. But don't pay them off completely. Rather, pay each one down to a balance of $100. However, if $100 is more than 30% of your available limit on any single card, then Ferguson says you should pay it off completely."

This is great advice. Having lots of credit is good, as long as your balances don't exceed 30% of available credit from any one source.