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Know Your Score

Should you decide to use a lending institution, your power to borrow money is linked to your credit score. Do you know yours? Stephanie AuWerter, editor of, joined us with some advice on learning and improving your score.

In times like these, a good score is more important than ever. Because of the ongoing credit crisis, lenders have pulled back. Whether you're looking for a mortgage, a credit card or a small business loan, the standards are now tougher. If you want to get the best rates, you need a great score. FICO scores range from 300 - 850 and you should shoot to have a score of 750 or higher. The good news is you can take steps to increase your score fairly quickly. Step number one is to know where you stand and you can pull your score at

The worst thing you can do to your credit score is not pay a bill on time. It will crush it. But if that's happened to you, you have nothing to lose by calling up the lender and asking that they remove it from your credit report. They have absolutely no reason to accommodate you, but if you've been a good customer and if you have a good reason they may be willing to work with you. It certainly doesn't hurt to ask.

You also need to pay down your cards. Not surprisingly, big debts hurt your score. FICO does not like to see you reaching the upper limits of your credit line. And that's particularly tricky right now because some credit card companies are lowering the credit lines of certain customers. You want to keep your balances at 50% or less of your total available line. So pay down those debts .

Also, hang onto unused credit cards. Old cards that you don't use much any more may be helping your score. Part of your credit score is based on the length of your credit history. Also, cards that have untapped balances help with your credit utilization rate. It helps that you have untapped credit. So don't cancel an old card, provided you're not paying for it, and maybe once a year or so, make a purchase with it. It will help.

Finally, fix your mistakes. Nearly 80% of credit reports have mistakes on them, 29% of which are serious enough to result in a credit denial. So pull your report and give it a good review. You can do it for free once a year at If you find a mistake the credit bureau has 30 days to verify that the information is accurate, or else it has to be removed.

For more information on improving your credit score, as well as other personal financial advice, click here to visit
by Stephanie AuWerter

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