Many people wonder why we're in such a financial crisis these days. The answer may very well be attributed to the lack of education we received in school on the topic of personal debt responsibilities. Everybody should know how to work with the credit system and unfortunately, many are unequipped to do so. It is estimated that over 50% of US citizens have never even looked at their credit report and close to 90% of people have no clue how to read a credit report.

It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.

some of what you read here may not initially make sense. There are some common myths when it comes to credit, so sit back, relax, open your mind, and get ready to learn.

Maintaining the proper mix of accounts

For optimal credit, you will want to have the proper mix the following account types. Too many of some types of credit will hurt your credit scores.

One to two mortgages appearing on a credit report is the ideal way to go. Having at least one mortgage loan will impact your scores tremendously and if you don't have any mortgages at all, that can be something to strive to achieve.

Installment loans, such as car loans, can boost your credit rating if you have between one and three loans. Too many installment loans can cause a negative effect, so minimize them if you can. Other kinds of installment loans, like store furniture loans, don't have the same impact on your scores as the larger installment loans will. The smaller installment loans can be a great option for those with little-to-no credit but they don't hold the same cache' as an installment loan with a larger value, such as a car loan or student loan.

Revolving Accounts - Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.

To further boost your scores, try and keep your revolving balances below 50% of your credit limit. Older accounts, or seasoned accounts, establish that your credit has withstood the test of time and can make you look great to a potential lender. It's equally important to know that accounts that you cancel will only stay on your reports for two years and that cancelling a seasoned account can drop your credit scores significantly.