What’s the Score?

With banks now tightening their lending criteria, your credit score takes on a lot more importance. Back when banks were lending to just about anybody, you could get a mortgage with a score of just 500; now you need a score of at least 680 to get approval. A score of 720 or higher seems to be the ticket to credit Nirvana; anything lower and you probably face higher interest rates and additional barriers to getting a loan.

To boost your credit score, you first need to know what it is. You can get a free copy of your credit report at www.annualcreditreport.com, but you’ll have to pay one of the three credit reporting agencies to see your credit score. The three agencies are Equifax (www. equifax.com), Experian (www. experian.com), and TransUnion (www.transunion.com).

Once you know your score, there are some common-sense rules to help you push it higher. One of the most obvious strategies is to pay your credit card bills on time, since late payments can cripple your score. Paying the entire balance or at least more than the minimum each month is even better. It’s also a good idea to keep the ratio between your balance and your credit limit low, since one of the factors that make up your score is the amount of credit available to you. If you’re too close to the credit ceiling, your score will suffer. For the same reason, don’t close credit card accounts that you no longer use. The available credit on those cards will help raise your score.

Remember that building good credit takes time and consistency. Beware of quick fixes. Some “credit repair” scammers will promise to have negative marks removed from your report for a fee. The only company that can erase a black mark from your report, however, is the company that put it there.