Credit Scores - What's The Big Deal?How important are your
credit scores
? They are extremely important because simply:
Companies who provide credit want to know if and how they should do business with you. Your credit scores help them determine that. What scores are the real thing? Yes, there are different scoring systems out there, but the only ones you need to know about (because they are the ones that businesses use) are your “FICO” scores. FICO scores (there are three of them) are computed by Fair Isaac & Co. Each one of your FICO scores corresponds to each one of your credit reports from the following three major credit bureaus: o Equifax o Experian o Trans Union How do you improve your scores? 1. Pay your bills on time. If you do, your credit ought to be fairly good even if you have a large amount of debt. That means credit card companies will be glad to extend special offers to you if you agree to consolidate with their card. 2. If you can, pay off debt rather than move it around. This is a doozy. Paying down your revolving debt is definitely the most effective way to improve scores. But, moving it around smartly and paying it off at the same time may be more realistic. 3. Check your credit report and correct blatant mistakes. Your credit scores reflect what is on your credit reports. If there are mistakes, your credit scores will be affected. Review your credit reports from all three credit bureaus once a year and correct mistakes. Reviewing your credit reports is easy, but you’ll find that correcting mistakes can be tough and can take up to 3 months or longer.
4. Keep balances low on credit cards. Easier said than done, huh? Use 25% - generally, it’s good to keep your balances at or below 25% of your credit card limit. 5. Don’t consolidate loans and close older accounts. This is a mistake that a lot of folks make. If you are able to consolidate to a lower interest rate, that’s good. But, do not close older accounts once you pay them off. You will actually hurt your credit score. Notice following example… Joe B. had 3 credit card debts… 
He decided to consolidate when we found a better interest rate… 
Remember, though, don’t get deeper in debt. If you do consolidate and keep the older accounts open, this doesn’t mean it’s party time.
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