Q. I am planning to purchase a home this summer. To improve my credit score to aid in qualifying, would it be better to pay off a fixed-rate loan or pay down, or pay off, a credit card?

A.You'll almost certainly get the biggest bang for your buck by paying down, or off, a credit card.

One of the most important factors in calculating your credit score is how much of the available credit on your cards you've actually used.

Fair Isaac Corp., creator of the most widely used scoring system, will penalize you if you use more than 50% of your available credit. For example, if you have a credit limit of $6,000, carrying a balance higher than $3,000 would lower your FICO score.

So if you can reduce the debt on that card to less than 50% of the credit line, you'll definitely improve your score.

For more ideas see our 6 smart ways to improve your credit score.