Want to put $50k in the bank? Manage your credit wisely.

Consumer friendly credit cards? Think again. In the last few years the FTC (federal trade commission) has fined several large credit card companies for using tactics they know will lower your credit score. Their plan: to lure you in with a zero percent offer, then trap your money there, leaving you unable to transfer your balance out as your rate increases.

To protect yourself from such predatory practices you need to know exactly how your credit score is calculated. There are five components to your score and some carry more weight than others.

1) The largest portion of your score, 35%, is based on your payment history. Paying on time can mean the difference between average and exceptional credit. What bad boy tactics do you need to watch out for? One card company was fined for actually holding payments and shredding checks to collect late fees. The good news; a few days late does not count against you. A payment can not be reported late unless it is thirty days or more past due.

2) The next major component, accounting for 30% of your score, is the amount of revolving debt you owe in relation to your available balances. It is calculated on an individual account basis and an overall basis. The goal: you do not want to borrow more than 50% of your available balance from any single lender. (Mortgages and auto loans do not fall in this category of revolving debt.) This means contrary to popular belief, it is better to owe a smaller amount on several cards than to max one card to its limit.

Tactics to watch out for: some card companies do not report an available balance. If this is the case, then when calculating the ratio of debt to available credit, in lieu of an available balance your highest outstanding balance is substituted. This is more easily understood by looking at an example. Assume you have an available credit limit of $5,000, but the highest outstanding balance you have had is $1,000. If that lender does not report available balances then the maximum amount shown as available on your credit report will be $1,000 for that account. This means even if you owe only $800, it will appear as if you have borrowed well over 50% of what is available.

3) Your length of credit history comprises 15% of your score. People with credit scores over 800 typically hold at least three credit cards (with low balances) which they have had open for over seven years each. Rather than closing accounts it is best to work toward paying them off and then let the account remain open with a zero balance.

4) Inquiries and new debt account for 10% of your score. The good news; if you are shopping for a house, all mortgage inquiries within thirty days of each other will be grouped as one inquiry. For autos, it is a fourteen day limit.

5) The last 10% of your score is based on the type of credit; installment vs. revolving debt. Installment debt, such as an auto loan, is looked upon more favorably than revolving (credit card) debt.

It has been proven that by managing your credit wisely, over your life time you can pay $50,000 less in interest than a similar person with lower credit. For additional information on how to manage your credit visit www.thecreditroadmap.com.