It’s human nature to focus on what’s important when it’s right now and that can be true when we’re making a major financial decision like buying a house or a car, or committing to a business loan. Then of course we’re suddenly motivated to learn about credit scoring. It’s best of course to learn now and take steps to improve your score before you go into the market looking for the best deal. Improving our FICO scores is like getting in shape, it takes time and practice. So while it is never too late to begin down the path to be in great shape, it is helpful to understand that the path may take time and there’s no quick fix. In fact quick-fix efforts are costly and can backfire.

• Pay your bills on time. Delinquent payments and collections can have a significant adverse impact on your FICO score. Therefore, make sure that you get your payments to your creditors on or before the due date on your statements.

• Keep revolving credit balances low. The key point here is that you need to be aware that the FICO scoring model uses a sliding scale and that the LOWER a person’s utilization rate (outstanding debt to your available line of credit) on any one account the better! There is no magic number, just the lower the better.

• Get current and stay current if you have missed payments.

Crisis in your credit is not going to impact you forever. Credit crises can be overcome by changing payment patterns. Scores do improve over time. The longer you pay your bills on time, the better your credit score.

• Pay off debt rather than moving it around.

• Contact your creditors if you are having trouble making ends meet.

• Don't close unused credit cards as a short-term strategy to raise your score.

• Use each of your credit cards at least once every six months.

• Open new accounts responsibly. And, don't open a number of new credit cards that you don't need, just to increase your available credit.

• Don't open many new accounts too rapidly if you have been managing credit for a short time.

Nabil Captan is a nationally recognized credit scoring expert and an illustrious educator. Nabil’s dedication to financial literacy led him to create and produce The Credit DVD Series in English & Spanish. You can contact him directly at Ncaptan@creditdvd.com or go to www.creditdvd.com for more information. Copyright 2009. Financial DVDs. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without the consent of Financial DVDs Inc.

Brought to you by SCORE, America's small business mentors, at www.score.org.
Ask SCORE