Debt is not something to fear, it’s a tool in this credit economy that we must take time to understand how to properly use. And, the time to learn is right now. When we’re making a major financial decision like buying a house, a car, applying for a credit card, committing to a student loan, or even getting a job, we’re suddenly motivated to learn about credit scoring, especially when we find out our score is keeping us from getting the best deal or the best job. Understanding and improving our credit scores is like getting in shape, it takes time and there’s no quick fix.

Six Steps to Improving Your Credit Score

 FICO score, a three-digit credit rating used to determine the likelihood you will pay back a loan. Credit scores range from 350 (poor) to 850 (excellent). Do you know yours?

• Pay bills on time! Your payment history makes up 35% of your FICO score.
• Don't consolidate and then close out your old, revolving debt accounts. The age of your credit accounts is an important, positive factor for a good credit score.
• Don't load up a credit card's debt close to its limit. This weighs negatively on your credit score.
• Pay down high-balances; don't shuffle debts among several lenders. Keep no more than a balance of 30% of your limit.
• Settle any collections or past-due accounts.
• Dispute and resolve any inaccurate items in your credit report. Time may be your only remedy for mitigating the damage from bankruptcies, foreclosures and other judgments. The last two years of your credit history are the most important.
• Do your credit shopping (mortgage or automobile) over the same 45-day period so that numerous credit applications show-up as one inquiry on your credit report. This minimizes the impact to your credit score.