What is a good credit score and how to get (or keep) one

Since the economic crisis killed off all of that easy-to-acquire credit that flourished like so much financial kudzu a few years ago, Americans are more concerned than ever about their credit scores. Although scores can go as high as 850, very few people ever attain that "perfect" credit. You're not alone if you're wondering: What is a good credit score, anyway?

Well, for starters, it's a lot higher than it used to be. Earlier this decade, you could easily get credit with a score of 650 or so, and 720 was top-of-the-line. Today, the "new" 650 is around a 720. For big loans such as a mortgage or car loan, lenders may want to see a score of 750 - a full 100 points higher than the norm that characterized the borrowing spree of the boom years.

Now that having a higher credit score is necessary if you want to borrow money at less-than-onerous terms, Walletpop talked to a few credit experts to get their top tips on how to get - or keep - a gold star-worthy score. Here's the inside scoop from Evan Henricks, author of the book Credit Scores & Credit Reports: How the System Really Works, What You Can Do; Gail Hillebrand, financial services campaign manager at Consumers Union, and Craig Watts, public affairs director of FICO.Don't pay your bills late. The first thing all of our experts mentioned was the need to make your payments on time. It seems like a "well, duh," piece of advice, but this is far and away the biggest component that goes into creating your credit rating - it counts for 35 percent of your entire score. If you blow off a bill, you could get a double-whammy on your credit score: once, when the vendors lists you as late-paying, and a second time if they send your account to a collections agency.

While credit cards and other installment payments (like home, car and student loans) are what people usually have in mind when they think about bills due, don't think you can waffle on other financial obligations. The bad news is that while you don't get any credit for paying other bills, such as utilities, on time, failing to pay them could impact your score, especially if the company you owe takes you to collections. Yes, it seems unfair to only have the negative count, but that's how credit-scoring works.

One related note: While paying bills late can get you in trouble, paying them early doesn't help you out. Yes, if you're paying via good ol' mail, you might want to give yourself a couple of weeks as a buffer to make sure your check gets there by the due date, but the credit bureaus don't raise your score for paying early.

Keep your balances well below your credit limit. In a perfect world, you'd carry balances of no more than 25 percent of your available credit limit on your credit cards or any other lines of credit you keep. Experts call this a "utilization ratio." In the current economic climate, you might find this difficult; card issuers are cutting the credit limits of customers, even those with good credit scores who always make their payments on time. If one or more of your credit limits has been chopped, it's not necessarily your fault, but it can impact your score.

However, this isn't a license to call your credit-card company and try to wheedle a higher credit limit out of them. Yes, this could boost your score if you're successful at getting all of your limits boosted (which is an unlikelihood in today's economy anyway), but experts say that for most consumers, the temptation of those higher limits is too hard to resist, and soon you'll be over that 25 percent threshold again. It's much smarter to keep or pay down your balances so they only add up to 25 percent of your available credit. Basically, lenders want to see that you have credit but don't use it. Sounds counterintuitive, but that's the way the system works.

Don't open a lot of new accounts at once. It raises a red flag when you open a lot of accounts, because the conventional wisdom is that you're going to use all of those new cards to borrow a lot of money, which makes you a statistically higher risk. Whether or not you do borrow to the hilt or manage to pay it off doesn't matter; it's going to lower your credit score either way.

Try to limit balance transfers to once annually, and don't open more than three cards (retail-branded ones count, too) in a one-month period. If you're planning a big buying spree - say you're moving from a teeny apartment to a spacious house with little more than a futon and a mini-fridge - secure that all important mortgage first before signing up for credit cards at the furniture outlet, the electronics superstore, etc.

Don't have too many credit cards - or too few. Credit ratings agencies look askance on anyone awash in credit cards, but only having one for emergencies - or non at all - can also lower your score. It's not a good idea to have more than six cards, not including store-branded cards. While we're on the subject, a word about those store cards: They're not so hot. It's certainly not going to kill your credit score if you have a couple, but you don't want those to be your only credit cards, because the ratings agencies rank them lower than a conventional credit card.

If you only have a few credit cards, closing even one could lower your score. Hang onto it and just use it occasionally, or set up an automatic payment for one monthly service (such as your car insurance or your TV service) and pay it off in full every month.

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Do yourself a "HUGE FAVOR" and carefully read this:

The 21st Century Act: Final Amendments to Regulation CC Section:
"Prohibits" reimbursement of Credit, Loan, and Finance Balances to a "Bank Entity" leaving only "Nonbank Consumers" able to receive reimbursement, as specified on Pages 85 and 86.

The 21st Century Act states on pg. 85 and 86 that "Only Nonbank Consumers can suffer losses and File for
Re-credit or Re-claim on any Accounts under the Federal Reserve System" also “Any Second or Third Party Presenters utilizing a Banks Documentation, Contracts and/or Agreements to seek Claims shall be considered to be that Bank under the Rules and Regulations”, the Expanded Definitions also includes Credit Cards and Home Equity Lines of Credit.
Also on Pages 100 and 101 "In any Financial Claims the Indemifying Bank (Parent Bank) must be Identified".

(Left-Click to Search Link)
21st Century Act: Final Amendments to Regulation CC http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

This Federal Law signed January 1, 2006 makes it "Fraudulent" and therefore "Illegal" for the 3 Major Personal Credit Reporting Agencies: Equifax, Experian, and TrasUnion to allow the Banks and the Banks "Third Party Presenters" to place any claim of "Negative" or "Potentially Negative" Accounts on your Personal Credit Based upon the fact that they have no "Legal Grounds or Claim" to the Money.

This is an "Unfair Practice" that diminishes our Financial ability to support ourselves and adversely affects our ability to gain work in many areas which breaks "Antitrust Laws".

These Rules also back claims of: "Aiding and Abetting" Racketeering and Extortion (of Finance Accounts and Personal Credit Reports), Pandering (of Credit and Loan Accounts, and Conspiracy to wit), Theft, Fraud, Federal Mail Fraud, and Telephone Harassment. Also "Threatening of the U.S. Financial Infrastructure", which is a "Capital Crime".

In order to engage the Federal Trade Commission to act against this injustice we must File many Claims, as these Reports must be Filed by a large number of people in order for the Federal Trade Commission to pursue
"Legal Action".

(Left -Click to engage Email Address)


This is way easier than "Occupying Wall Street"!

March 11 2012 at 6:32 PM Report abuse rate up rate down Reply

While I was looking for a credit report site, my firend told me about a site, that offer:

- 100% Free 3 in 1 Credit Report
- Credit Monitoring
- Fraud Protection

All in one...

I tried it and I'm so satisfied with them.I just wanted to recommend you that site:


January 12 2012 at 5:34 AM Report abuse rate up rate down Reply

Great article,

If you see any mistakes in your credit report, you can dispute them in all 3 main agencies.They support their own dispute centers, on their sites.So fist step is to go and to get your free credit report.I would suggest you ---EliteCreditReport.info---- They are one of the most trusted companies in US!They offer 100% free 3 in 1 credit report + credit monitoring.

After that you need to check are there any mistakes and if so you need to write a letter to these agencies.Typically you will receive response in 1 month.

Also if you change anything you need to report your changes so your credit report will be increased...

Hope that helps.

January 12 2012 at 3:12 AM Report abuse rate up rate down Reply